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Microsoft confirms plans to buy TikTok

The company said it was 'prepared to continue' talks to rescue the stricken Chinese app – though a deal is not certain.

Microsoft has confirmed that it will press forward with plans to buy the Chinese video-sharing app TikTok after receiving "personal" assurances from Donald Trump.

The software giant said on Sunday that it would "move quickly to pursue discussions" with TikTok's Beijing-based parent company, ByteDance, aiming to complete them by no later than September 15.

Talks had been frozen following Mr Trump's declaration that he was opposed to any deal and that he had the "authority" to ban TikTok from the whole United States.

But on Sunday Mr Trump appeared to have given his blessing to Microsoft's chief executive, Satya Nadella, after a personal meeting between the two men.

A deal with Microsoft could rescue TikTok from what might have proved a mortal blow – as well as making its new owner a hero to teenagers across the Western World.

Microsoft said: "This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections.

"Among other measures, Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States.
"To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred.
"Microsoft appreciates the US Government’s and President Trump’s personal involvement as it continues to develop strong security protections for the country."

The company added that the discussions were preliminary and that there was no guarantee of a deal. Any agreement would be subject to a "complete security review" and could still be blocked by the Committee on Foreign Investment in the United States (CFIUS).

Microsoft's announcement was the first time it has officially commented on widespread reports that it was hoping to buy the stricken viral video app, which was last valued at about $50bn (£38bn) in the private market.

Any deal would shake up the US tech market, dragging Microsoft into the vicious competition between TikTok and its rivals Facebook and YouTube.

It would also mark a new era for Chinese tech giants, who have long dreamed of global success but who will now be leery of attempting to crack the US at all.

Since its launch in 2017, TikTok has rapidly captured the hearts of a reported 100 million people in the US, including much of Generation Z. But it has also provoked deep suspicion from some US politicians due to its Chinese ownership, which critics say make it a de facto spying tool for the People's Republic.

Dan Ives, managing director of equity research at Wedbush Securities, said the Trump administration's belligerence towards TikTok had put ByteDance's "back against the wall".

He went on:

"If they decided to play with fire and just walk away from the US market, it would take about 40-50pc of the valuation off ByteDance... that would be a body blow to TikTok.
"It could be a doomsday scenario, where they are wildly popular today but gone tomorrow. With competitors going after market share by the minute, right now time is not on their side, and their options are limited."

The app would almost certainly be Microsoft's biggest acquisition to date – the last one being LinkedIn, for which it paid $28bn in 2016.

Would we see African government go to such lengths to protect their nation's security and their citizens' private data? It remains to be seen.