Microsoft and Oracle had been in talks with TikTok's owner, China-based ByteDance, to acquire the U.S., Canada, Australia and New Zealand operations for the popular social media app. Microsoft's bid had included Walmart as a participant.
The order cited national security concerns regarding data privacy and TikTok's ownership by a Chinese company.
Reuters has reported that the Oracle deal would not require ByteDance to apply to Chinese authorities for an export license for TikTok's algorithm. CGTN's report confirms this by saying TikTok will be picking the company as a "trusted tech partner" in the US.
Mnuchin, who chairs CFIUS, and Commerce Secretary Wilbur Ross were meeting at the White House to consider ByteDance's proposal, two of the sources said.
TikTok and Oracle will become business partners in the United States.
Trump also said last month that proceeds from the deal should go to the USA government for making the deal possible. China countered in August by barring TikTok from making such a move without Beijing's approval, and a source at TikTok parent company ByteDance told the South China Morning Post that the app's algorithm was indeed not for sale. "We look forward to seeing how the service evolves in these important areas", says Microsoft in a statement.
The US president also said that deal has to be "100% as far as national security is concerned".
None of this matters, at least for now, as Microsoft will not be buying the company or any part of it.
The Oracle bid would next need approval from the White House and Committee on Foreign Investment in the United States, a source told the Journal, with both parties under the belief it would meet USA data security concerns.
When asked whether the United States government would benefit from the deal, he replied that there is no legal way to ensure that the money from the TikTok deal goes to the government.
It is unclear whether Trump, who wants a U.S. technology company to own most of TikTok in the United States, will approve the proposed deal.