Jul 31, 2020 - Technology

Report: Trump to order ByteDance to sell TikTok's U.S. operations

Illustration of someone cutting a tag off of TikTok

Illustration: Aïda Amer/Axios

The Trump administration plans to sign an order directing China-based ByteDance to divest its U.S.-based video sharing app TikTok, which is already in talks to be acquired by Microsoft, according to news reports Friday.

Why it matters: The U.S. since last year has been reviewing national security risks of ByteDance's control of TikTok, recently valued at $50 billion. This order would require ByteDance to cede majority control of TikTok, Bloomberg reports, citing people familiar with the matter. The order could come as early as Friday.

Context: The Trump administration has been casting a cold eye on Chinese companies operating in the U.S., with campaigns aimed at Huawei, ZTE and other technology firms. Lawmakers on both sides of the aisle have argued that TikTok is a national security risk.

Meanwhile: Microsoft is in talks to potentially buy TikTok, Fox Business' Charles Gasparino and the New York Times reported Friday.

  • Yes, but: The Trump administration is "deeply concerned" about such a deal, Gasparino tweeted, and would vet it extremely closely to ensure TikTok would retain no ties to Chinese investors.

Be smart: In general, Microsoft has been moving away from big consumer businesses, especially ad-funded ones, notes Axios' Ina Fried.

  • But Microsoft isn’t closed to consumer deals, especially if it sees them as foundational and capable of introducing a new generation of tech users to its ecosystem. Consider that the company’s first big acquisition under CEO Satya Nadella was the company behind Minecraft.
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