Microsoft is in preliminary talks to buy TikTok

As Donald Trump’s administration ratchets-up threats to ban TikTok in the U.S., software giant Microsoft is ready to pounce with a game-changing deal.

In a statement posted Monday morning AEST (late Sunday in the U.S.), Microsoft confirmed it is in preliminary talks with ByteDance to buy its popular short-form video business.

Microsoft CEO Satya Nadella and President Trump have had a “conversation” and the tech giant is “prepared to continue discussions to explore a purchase of TikTok in the United States,” the statement reads.

Microsoft will “move quickly to pursue discussions with TikTok’s parent company, ByteDance, in a matter of weeks,” the statement continues, with a deadline of September 15th for the conclusion of discussions.

According to a proposal agreed upon by both companies, Microsoft would buy TikTok in the United States, Canada, Australia, and New Zealand.

Other American investors may be invited to join in as minority stakeholders.

TikTok

If Microsoft does strike a deal, it would almost certainly provide a lifeline to the Chinese app, which the White House is threatening to shut down over national security and privacy concerns.

Last month, U.S. Secretary of State Mike Pompeo went on the record with the warning that a TikTok ban was “something we’re looking at.” Use it only “if you want your private information in the hands of the Chinese Communist Party,” he added.

President Trump, who has been engaged in an escalating trade war with China, is stepping up the rhetoric.

“We are looking at TikTok. We may be banning TikTok,” Trump told reporters at the White House late last week. “We are looking at a lot of alternatives with respect to TikTok.”

ByteDance knows what’s coming.

As previously reported, its billionaire founder Zhang Yiming is said to be considering a sale, as part of a strategic manoeuvre to settle escalating tensions with the U.S. government.

Microsoft, with its ridiculously deep pockets, would make a good fit.

Critics of TikTok say the app can mine and share data on users with the Chinese government, or use the app to influence its 2 billion-plus users around the world.

Lil Nas X at TikTok

TikTok has denounced those accusations, though that hasn’t stopped India from banning the app. The Australia government might be close behind.

Last month, The Herald Sun reported that Australia’s government is facing calls to ban the app over growing national security and data spying fears.

Plans are said to be underway to block the app ahead of the Foreign Interference through Social Media senate inquiry amid fears that the Chinese-owned platform leaks users’ information to Beijing.

“TikTok does not share information of our users in Australia with any foreign government, including the Chinese Government, and would not do so if asked,” noted Lee Hunter, General Manager, TikTok Australia. “We place the highest importance on user privacy and integrity.”

In May 2020, it was the most downloaded app globally, according to market researcher Sensor Tower, with 112 million installs, a double-fold increase from the same month in 2019.

In recent weeks, TikTok has struck a US$200 million “Creator Fund” and announced a multi-year, global partnership agreement with the U.S. National Music Publishers’ Association (NMPA), ending a months-long war of words.

This article originally appeared on The Industry Observer, which is now part of The Music Network.