Currently, under scrutiny from Donald Trump and his administration, Chinese-owned video app TikTok is in talks to sell itself to tech behemoth Microsoft and a slew of other companies as the POTUS gears up to take harsh actions against the business, including forcing it to disassociate itself from its Beijing-based parent company ByteDance. These revelations have been made by people with knowledge of the discussions.
The highly influential Committee on Foreign Investment in the United States (Cfius) has been investigating ByteDance’s purchase of Musical.ly, the app that eventually became TikTik, 2017. The committee has decided to instruct ByteDance to dispossess TikTok, while the government finalizes the terms of the separation, according to a person with knowledge of Trump administration's plans, who preferred to remain anonymous.
Citing its Chinese ownership, White House officials have raised concerns about TikTok posing a national security threat. Treasury Secretary Steven T. Mnuchin, who spearheads the committee, explained the divestment plan to the president.
It remains to be seen what Trump will do. It is unclear whether the United States would apply a divestment order to all the app's American operations, and how its action would affect TikTok's global business. Aside from that, the president is considering taking a slew of other actions, including passing an executive order that could take advantage of the International Emergency Economic Powers Act to ban some foreign apps from the country's app stores, The New York Times reported.
Moreover, the administration is weighing whether to include TikTok’s parent ByteDance to an entity list, which would require it to have a special license to purchase American products and services, according to people with knowledge of the matter. Discussions are likely to continue into this weekend.
Details about how far TikTok’s talks to sell itself to other companies including Microsoft have reached, but it is imperative for the app to change ownership. The United States is one of the app's major markets, meaning, operating in the country is a priority. In an attempt to relieve concerns raised by U.S. officials, TikTok has offered other alternative solutions.
For instance, non-Chinese investors such as General Atlantic, SoftBank, and Sequoia Capital could purchase a majority stake in the app from ByteDance. Given that the company's valuation stands around 100 billion dollars, according to research firm PitchBook, a deal would likely be expensive.
In a recently released statement, TikTok refrained from addressing Trump's remarks or divulging details about the deal talks. In addition to TikTok, India has banned 106 Chinese apps as part of the move that has been welcomed by the administration as well as the lawmaker, NDTV reported.