The clampdown on Chinese companies by the United States seems to just have started. It’s now going beyond just Huawei and other hardware companies as the American government believes that there are more Chinese firms that pose a security risk. TikTok found itself in hot water after President Trump expressed concerns about the app collecting data on American citizens and that could pose national security risk.
However, the Chinese short-video making app, TikTok, could find a way out to avoid a ban if and only if it becomes an American company. A few days ago, rumors emerged that Microsoft is planning to acquire part of the social network, TikTok.
Table of Interests
Microsoft Confirms Interest In TikTok Acquisition
Now, Microsoft has officially confirmed that CEO Satya Nadella has been in talks with the President as well as ByteDance. 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.â€
The talks between the two companies will be completed by September 15 of this year, one way or another. If Microsoft strikes a deal, it will acquire TikTok operations in select markets and may invite other US investors to take on a minority share.
Note that the company just wants TikTok services to run in the United States, Canada, Australia and New Zealand. ByteDance will continue operating the social network in the remaining markets.
With Microsoft microsoft acquisition, the private data of American users is transferred to the US. The company is also committed to offering security oversight to the local governments.
ByteDance May Prefer Divest Than Sell TitTok To Microsoft – Reports
However, according to an internal source, these discussions will most likely be futile. The source claims that ByteDance founder, Zhang Yiming, and investors are unwilling to do business with an American company.
According to SCMP, ByteDance board of directors will rather divest the overseas version of the app. It is willing to do this to keep its operations in the U.S. instead of an outright sale. The new entity will retain the TikTok name but will have a different management method. Furthermore, the new TikTok will no longer respond to ByteDance.
The source said:
“Except Zhang Yiming, almost everyone in the room likes this split…The mood is a bit like: The founder will be out and the house will be ours…But even for Zhang himself, there is actually no choice, because if you don’t let go, the app will dieâ€.
A Good Deal For Microsoft If Talks Goes Through
TikTok’s US arm alone is valued between $15 and $30 billion. This will be a major deal for the company as Microsoft’s other social networking attempt, streaming platform Mixer, was recently sent to the great server farm in the sky (this after signing multi-million dollar contracts with popular streamers to lure them away from Twitch).
