The fate of TikTok is hanging in the balance as Donald Trump has promised to ban it as soon as Saturday. Several major companies including Microsoft are said to be in talks to buy a stake in the app from its Chinese owners.
The in-vogue video-sharing app TikTok has drawn increased interest from US investors on the news that it might soon get banned in the United States over national security and censorship concerns.
As Fox Business and The New York Times reported on Friday, software giant Microsoft is in negotiations to buy TikTok’s US operations from its Chinese developer ByteDance, which is also considering non-Chinese investors like Sequoia Capital, SoftBank and General Atlantic.
According to Bloomberg’s sources, US government officials have had talks with “at least one other large company” other than Microsoft which hasn’t been identified.
“While we do not comment on rumours or speculation, we are confident in the long-term success of TikTok,” the Chinese company said in a statement on Friday, hours after President Donald Trump announced that the app will be banned in the United States.
Trump told reporters that he would sign the document ordering ByteDance to “divest its ownership” in the app’s US business as soon as Saturday.
One of the world’s fastest-growing social media apps (with about 80 million monthly active users in the US and 800 million globally) has come under scrutiny from the White House and US lawmakers, who accuse TikTok moderators of censoring content sensitive to Beijing and transferring the data of American users to China. TikTok denies both charges.
The company is opening a “transparency centre” in California to assuage concerns over its US operations and has hired several top executives from US-based companies. These included Disney’s Kevin Mayer, Warner Music Group’s Ole Obernmann, Microsoft’s Erich Andersen, and YouTube’s Vanessa Pappas.
The US Army this year banned soldiers from using TikTok on military-issued smartphones, and a similar ban is being discussed in Congress for federal government employees. US national security officials are also investigating the 2017 acquisition of karaoke app Musical.ly by TikTok.
The US crackdown on TikTok parallels a broader fight with Chinese tech companies like Huawei and ZTE, which have likewise been banned from use by the US government and government contractors over vague national security concerns. The Trump administration has attacked Huawei, the world’s No. 1 telecom equipment maker, on multiple fronts, including by trying to cut off its chip supplies and pushing allies to exclude it from next-generation mobile phone networks.