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Microsoft says it is still talking with Trump about buying TikTok from its Chinese owner

President Donald Trump said that he will ban the popular short-form video app TikTok from operating in the United States, rejecting a potential deal for Microsoft to buy the app from its Chinese-owned parent company.

Posted: Aug 1, 2020 10:33 AM
Updated: Aug 3, 2020 5:45 AM


Microsoft says it is still discussing a potential purchase of TikTok, days after President Donald Trump said he would ban the popular short-form video app from operating in the United States.

In a blog post Sunday, Microsoft said its CEO Satya Nadella has talked with Trump about buying the app, which is owned by Chinese start-up ByteDance. US policymakers have for weeks expressed concerns about the app as tensions between the United States and China escalate, with many asserting that it could pose a national security risk.

'[Microsoft] 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, adding that it will 'move quickly' to talk with ByteDance 'in a matter of weeks.'

'During this process, Microsoft looks forward to continuing dialogue with the United States Government, including with the President,' the company added.

The Washington State-based firm's blog post suggests TikTok could avert the ban that Trump threatened Friday night, when he said he could use emergency economic powers or an executive order to block the app from operating in the United States. Microsoft's remarks also come after the Wall Street Journal reported that the company's talks with ByteDance had been put on hold after Trump's comments.

A deal would create a new structure wherein Microsoft would own and operate TikTok services in the United States, Canada, Australia and New Zealand. As part of the agreement, Microsoft said it would ensure that all private data of TikTok's American users would be transferred to and remain in the United States.

TikTok has previously stressed that its US user data is already stored on US-based servers and backed up in Singapore, and is therefore not subject to Chinese law as some US officials have feared.

'This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections,' Microsoft said. 'The operating model for the service would be built to ensure transparency to users as well as appropriate security oversight by governments in these countries.'

The company added that 'in any event' it would finish talking with ByteDance no later than September 15.

ByteDance did not immediately respond to a request for comment about the Microsoft post. But the company said in a statement published Sunday on Toutiao, the Chinese social media site it owns, that it 'has always been committed to becoming a global company.'

'In this process, we are faced with all kinds of complex and unimaginable difficulties,' the company added. It cited a 'tense international political environment,' among other issues.

'But we still adhere to the vision of globalization and continue to increase investment in markets around the world, including China, to create value for users around the world,' ByteDance said. 'We strictly abide by local laws and will actively use the rights granted to us by the law to safeguard the legal rights of the company.'

TikTok did not respond immediately to a request for comment Sunday night, but a TikTok spokesperson said in a statement to CNN Business on Saturday that it is 'confident in the long-term success' of the app. The company has hired nearly 1,000 people to its US team this year, and plans to hire another 10,000 employees across the United States, the spokesperson said. It also recently announced a 'Creator Fund' to lure top talent to create content for the app.

Beijing, meanwhile, blasted Washington after Trump floated a ban.

'The US has been stretching the concept of national security, without any evidence, and only based on presumption of guilt. It is threatening certain businesses,' Ministry of Foreign Affairs spokesperson Wang Wenbin told reporters Monday. 'China is firmly opposed to this.'

TikTok could be the 'right partner at the right time' for Microsoft, according to Wedbush Securities analyst Daniel Ives, who pegged the app's valuation at roughly $50 billion. (He added, though, that TikTok's value could be hurt considerably if it were to be shut down.)

Ives added that if the sale is successful, Microsoft would also receive a social media 'crown jewel' at a time when tech peers like Facebook and Google parent Alphabet are facing regulatory scrutiny, making it difficult for them to consider Tiktok.

— Shawn Deng, Jill Disis and Isaac Yee contributed to this report.

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