Microsoft confirmed that it is in talks to buy TikTok from China’s ByteDance — and will continue the negotiations — coming after Donald Trump said he opposed such a deal and has claimed he plans to ban TikTok.
Microsoft said that if it consummated a deal for TikTok, it would move all data servers covering U.S.-based users to American shores, in a bid to alleviate U.S. policymakers’ concerns that Chinese government officials might be able to track TikTok users or access private messages.
“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,” the Redmond, Wash.-based tech giant said in a statement Sunday.
Trump told reporters Friday he planned to take some kind of action to ban TikTok over national-security concerns given the popular social-video app’s Chinese owners. However, experts have questioned whether such a move would hold up on legal grounds.
Microsoft, in its statement, said, “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.”
TikTok has been valued at $50 billion by a group of ByteDance’s U.S.-based investors including Sequoia and General Atlantic, who also have been seeking to acquire control of TikTok, Reuters reported last week.
Microsoft cautioned that the talks with ByteDance are preliminary and that “there can be no assurance that a transaction which involves Microsoft will proceed.” The company said it doesn’t plan to provide additional info “until there is a definitive outcome to our discussions.”
In any event, Microsoft said, it plans on “completing these discussions” with ByteDance about an acquisition of TikTok no later than Sept. 15, 2020.
Among other measures, Microsoft said, it would ensure that all private data of TikTok’s U.S. users “is transferred to and remains in the United States. To the extent that any such data is currently stored or backed up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred.”
According to Microsoft, ByteDance and Microsoft notified the interagency Committee on Foreign Investment in the United States (CFIUS) of their intent to explore a preliminary proposal that would involve Microsoft buying TikTok’s operations in the U.S., Canada, Australia and New Zealand. Microsoft said it “may invite other American investors to participate on a minority basis in this purchase.”
TikTok recently hired former Disney exec Kevin Mayer as CEO. In a move aimed at alleviating security fears over the app, Mayer last week announced that TikTok will provide greater transparency into its operations by publicly disclosing the app’s algorithms, moderation policies and data flows.
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