The recent talks between tech giant Microsoft Corporation and ByteDance Ltd. are in for a major turn of events. President Donald Trump has reportedly given ByteDance a 45-day ultimatum to either sell TikTok to Microsoft or face legal actions.
This move prompted the U.S. tech giant to announce its participation in the social media contract which would further inflame tensions between America and China. Trump claimed on Friday that he wants to block TikTok because of the personal details that the app manages, which possess national security risks.
According to sources, the notion of the acquisition was denied by Trump on Friday. However, in a statement released on Sunday by a Washington-based firm, following a conversation between Trump and Mr. Satya Nadella, CEO of Microsoft, said it would continue negotiations to acquire TikTok from ByteDance and aims at reaching an agreement by 15 September. It is a deadline that was put to Microsoft and ByteDance by the Committee on Foreign Investment in the United States (CFIUS) which tracks activities for possible national security threats.
The agency will supervise the talks between ByteDance and Microsoft. In his statement, Microsoft advised that an agreement would be signed without certainty.
Microsoft said it would take over the activities of TikTok in the U.S., Canada, Australia, and New Zealand under a new contract. It will ensure the transition of all private data of US users of TikTok to remain in the United States.
The amount Microsoft will pay for TikTok is not clear. ByteDance's forecasts for the app were over $50 billion, although the U.S. could lower the price.
With the proposed TikTok acquisition which features 100 million US users, Microsoft will be granted an extraordinary opportunity to compete with social networking giants like Facebook Inc and Snap Inc. The LinkedIn network is also owned by Microsoft.