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Aug 1, 2020
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Microsoft is reportedly in talks to buy TikTok’s US operations

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SAN FRANCISCO — TikTok, the Chinese-owned video app that has been under scrutiny from the Trump administration, is in talks to sell itself to Microsoft and other companies as President Trump weighs harsh actions against the business, including forcing TikTok to divorce itself from its parent company, ByteDance, said people with knowledge of the discussions.

The powerful Committee on Foreign Investment in the United States, or Cfius, has been examining ByteDance’s 2017 purchase of Musical.ly, an app that eventually morphed to become TikTok. The committee has decided to order ByteDance to divest TikTok, and the government is engaged in negotiations over the terms of the separation, according to a person familiar with the administration’s plans, who spoke on the condition of anonymity. White House officials have said TikTok may pose a national security threat because of its Chinese ownership.

On Friday, Treasury Secretary Steven T. Mnuchin, who leads the committee, briefed the president on the divestment plan. But it remains unclear what the president will do, including whether the U.S. would apply a divestment order to all of TikTok’s American operations and whether its actions would affect the app’s global business as well.

Mr. Trump is weighing several other courses of action, including an executive order that could use the vast powers of the International Emergency Economic Powers Act to bar certain foreign apps from American app stores. The Trump administration has also considered whether to add TikTok’s parent to a so-called “entity list,” which would prevent it from purchasing American products and services without a special license, said people with knowledge of the matter. Discussions are expected to continue into this weekend.

In his comments on Friday, Mr. Trump told reporters that there were “a couple of options” with TikTok, including “banning” it. He added, “But a lot of things are happening, so we’ll see what happens. But we are looking at a lot of alternatives with respect to TikTok.”

Later on Friday, Mr. Trump said he planned to take action as soon as Saturday. He added that he was not leaning toward allowing an American company to buy TikTok’s U.S. operations.

It’s unclear how advanced TikTok’s talks to sell itself to Microsoft and other companies are, but changing ownership is crucial for the app. The United States is one of TikTok’s major markets, so continued operations in the country are a priority.

TikTok has discussed other scenarios to alleviate concerns by U.S. officials. In one scenario, non-Chinese investors like Sequoia Capital, SoftBank, and General Atlantic could purchase a majority stake in the app from ByteDance, people familiar with the discussions have said.

Any deal would likely be expensive. ByteDance’s valuation recently stood at around $100 billion, according to the research firm PitchBook.

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