Microsoft Corp is mulling to acquire Chinese-owned video app TikTok's US operations. The tech giant is in talks with TikTok's parent company ByteDance. The development comes as the US government weighs harsh action against the Chinese app and prepares to force ByteDance to divest its ownership in TikTok over data security concerns.
While the (US) government was ready to announce an order as soon as Friday, the decision was put on hold, pending further consideration by President Donald Trump.
Talking to reporters on Friday at the White House, Trump said that "we are looking at TikTok. We may be banning TikTok" adding that his government is "looking at a lot of alternatives with respect to TikTok".
Bloomberg News and the Wall Street Journal reported on Friday, citing anonymous sources, that the Trump administration could soon announce a decision ordering ByteDance to divest its ownership in TikTok.
Meanwhile, other prospective buyers could also come forward to buy the popular video app. The potential suitors to buy the Chinese app include Microsoft industry peers such as Amazon, Alphabet, Apple, and Facebook.
There have been reports of US tech giants and financial firms being interested in buying or investing in TikTok as the Trump administration sets its sights on the app. The New York Times and Fox Business, citing an unidentified source, reported on Friday that Microsoft was in discussions to buy TikTok, though Microsoft declined to comment.
TikTok issued a statement on Friday saying: "While we do not comment on rumours or speculation, we are confident in the long-term success of TikTok."
ByteDance launched TikTok in 2017, then bought Musical.ly, a video service popular with teens in the US and Europe, and combined the two. A twin service, Douyin, is available for Chinese users.
TikTok's fun, goofy videos and ease of use has made it immensely popular, and US tech giants like Facebook and Snapchat see it as a potential threat. It has said it has tens of millions of US users and hundreds of millions globally.
But its Chinese ownership has raised concerns about censorship of videos, including those critical of the Chinese government, and the potential for sharing user data with Chinese officials.
TikTok maintains it doesn't censor videos based on topics sensitive to China and that it would not give the Chinese government access to US user data even if asked. The company has hired a US CEO, a former top Disney executive, in an attempt to distance itself from its Chinese ownership.
US national-security officials have been reviewing the Musical.ly acquisition in recent months, while the US armed forces have banned their employees from installing TikTok on government-issued phones. Secretary of State Mike Pompeo said earlier this month that the US was considering banning TikTok.