The fast-growing short-video performance app TikTok has been given 45 days to sell its United States arm to Microsoft by President Trump, who has said he will only “allow” the purchase if the app totally spits from China.
Microsoft said on Sunday that it would continue discussions to acquire the popular short-video app from ByteDance, a China-based Internet giant.
The president had threatened to ban TikTok as early as Saturday but is now willing to “allow” its sale if it divests from its Chinese ownership, a report from Axios said.
Microsoft, based in Redmond, Washington and formerly owned by Bill Gates made the aforementioned statement after a conversation between its CEO Satya Nadella and Trump. Such a sale would also include that the private data of the app’s American users is transferred and will remain in the United States.
U.S. officials have repeatedly said TikTok under its current parent company, Beijing-based software firm ByteDance, poses a national risk because of all the massive amounts of personal data it handles.
“Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury,’ the company said in a statement.
Any deal completed by Microsoft could be worth billions of dollars, but the company said it was not likely a deal would be reached before mid-September.
The Chinese company had previously sought a minority stake in the app’s United States business, a proposal that was rejected by the White House. The new proposed deal would force ByteDance to exit the business completely, allowing Microsoft to take over U.S. operations, sources said on Saturday according to a report from UK-based Daily Mail.
“Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States,” Microsoft said in a statement Sunday.
“The two companies have provided notice of their intent to explore a preliminary proposal that would involve a purchase of the TikTok service in the United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets,” the statement continued.
The company added that appreciated the U.S. government and Trump’s personal involvement as it “continues to develop strong security protections for the country.”
Trump decided to back off on the ban, which some speculate may have been over fears that banning the app would alienate many of its young users prior to the U.S. presidential election in November.
A wave of legal challenges likely would have been triggered as well.
Several prominent Republicans put out statements in the last two days urging Trump to back the sale.
Negotiations between ByteDance and Microsoft will likely be overseen by the Committee on Foreign Investment in the United States (CFIUS) a U.S. government panel that has the right to block any agreement, the Daily Mail reported.