Microsoft talks to acquire TikTok to continue after Trump’s about-turn

US President Donald Trump has agreed to give ByteDance 45 days to negotiate a sale of its subsidiary TikTok to Microsoft, Reuters reported, citing people familiar with the matter. This follows discussions between the president and Microsoft CEO Satya Nadella after Trump threatened on Friday to ban the service altogether.

Following the talks, the Redwood, Washington-based tech giant said it would continue negotiations to acquire the short video service TikTok from ByteDance.

Under the proposed deal, Microsoft said it would take over TikTok’s operations in the United States, Canada, Australia and New Zealand. It said it would ensure that all private data of TikTok’s American users remains in the United States.

Read: Microsoft, TikTok deal on hold as Donald Trump mulls US ban

US authorities fear China-headquartered ByteDance could hand over user data to the Chinese government, posing a security threat. The US military has already banned the TikTok app from official phones while the US House of Representatives has passed a law that would prohibit federal employees from downloading the app onto government-issued devices.

Microsoft, which also owns LinkedIn, would emerge as a major competitor to social media giants such as Facebook and Snapchat were its bid for TikTok succeed. The company boasts 800 million active users worldwide, with 100 million of those being Americans.

It is not clear how much Microsoft is willing to pay for TikTok. Reuters reported last week that ByteDance’s valuation expectations for the app exceeded $50bn.

On Sunday, ByteDance complained it faced “complex and unimaginable difficulties” as it worked to grow into a global company. Apart from its difficulties in the US, TikTok has already been banned in India, where the service was hugely popular.

The Beijing-based company made the comments in a statement on Sunday posted on its official account on Jinri Toutiao, a news aggregator app it owns.

ByteDance also accused Facebook of plagiarism and smears, without elaborating. Facebook-owned Instagram is set to roll out Reels, a direct TikTok competitor in the short-video genre.