President Donald Trump has given China's ByteDance 45 days to negotiate a sale of TikTok to US tech behemoth Microsoft Corp, Reuters reported exclusively.
Microsoft said in a statement on Sunday that it would continue negotiations to acquire TikTok from ByteDance, and that it aimed to reach a deal by Sept. 15. This followed a discussion between Trump and Microsoft CEO Satya Nadella.
According to the U.S. officials, under its Chinese parent, TikTok poses a national risk because of the personal data it handles. Trump had warned on Friday that he would ban the popular short-video app.
However, Trump then changed his mind after considering the opinion of advisers and Republican party colleagues who said banning TikTok would alienate many of its young users ahead of the U.S. presidential election.
"A win-win in the making," Republican Senator Lindsey Graham tweeted in response to Trump's new stance on Sunday, Reuters reported.
'No Certainty of a Deal'
The Committee on Foreign Investment in the United States (CFIUS) will oversee the negotiations between ByteDance and Microsoft. However, Microsoft cautioned in its statement that there is no certainty a deal will be reached.
"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," Microsoft said in a statement.
ByteDance and the White House did not immediately respond to requests for comment on the Microsoft talks. In a statement issued late on Sunday that did not mention TikTok, ByteDance said it faced "complex and unimaginable difficulties" in going global.
As relations between the United States and China deteriorate over trade, Hong Kong's autonomy, cyber security and the spread of the novel coronavirus, TikTok has emerged as a flashpoint in the dispute between the world's two largest economies.
State-backed newspaper China Daily on Monday called ByteDance the victim of a "witch hunt" from the United States, and said Washington had not provided evidence to support its allegation that TikTok posed a threat to U.S. national security.
Microsoft, which also owns professional social media network LinkedIn, would become a major competitor to social media giants such as Facebook and Snap Inc were its bid for TikTok, which boasts 100 millions U.S. users, to succeed.
Under the proposed deal, Microsoft said it would take over TikTok's operations in the United States, Canada, Australia and New Zealand. It said it would ensure that all private data of TikTok's American users is transferred to and remains in the United States.
Microsoft may invite other American investors to acquire minority stakes in TikTok, the company added. About 70% of the outside capital ByteDance has raised has come from the United States.
It is not clear how much Microsoft could pay for TikTok. Reuters reported last week that ByteDance's valuation expectations for the app exceeded $50 billion, although U.S. pressure to divest it could lower that price tag.
(With Reuters Inputs)