The Trump administration will force Chinese tech giant ByteDance to divest ownership of TikTok’s U.S.-based operations–and Microsoft is reportedly in talks to become the app’s new parent.
According to a report from Bloomberg, Donald Trump will sign an order soon, possibly today, that will tell the Council on Foreign Investment in the United States (CFIUS) to begin ByteDance’s divestment process. CFIUS is the department that last November launched an investigation into ByteDance and whether it could be utilizing TikTok to scrape data about or censor the content of U.S. users.
So, what does this mean for all the TikTokers worried about losing access?
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Well, we saw CFIUS’ divestment process play out last year with dating app Grindr and its former Beijing-based owner, Kunlun Tech. Like it is apparently about to do with TikTok, CFIUS judged Grindr was a national security risk because it gave Kunlun access to personal data about stateside users. The department then set a deadline for Kunlun to cede ownership, and it did, divesting Grindr in a CFIUS-approved sale to investor group San Vicente Acquisition for $608 million.
In TikTok’s case, the new owner might be Microsoft. People familiar with the matter told The New York Times that the company–which abruptly shuttered its Twitch competitor Mixer last month–is in talks for a deal that “could help alter TikTok’s ownership.”
However, TikTok’s situation may be a bit more complicated than Grindr’s. This afternoon, Trump indicated that a new owner might not be enough, telling White House reporters that he’s still considering outright banning the app.
“We’re looking at TikTok, we may be banning TikTok,” he said. “We may be doing some other things. There’s a couple of options. 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.”
Per the Times, the CFIUS-driven divestment is going to happen, but the other “couple of options” include the ban and adding ByteDance to an “entity list” that bars foreign companies from buying American products and services without a special license.
Like a lot of recent weeks, this one has been busy for TikTok. Yesterday, competitor app Triller filed a lawsuit against it, alleging patent infringement. On Wednesday, investors valued TikTok at a whopping $50 billion–50 times its projected 2020 revenue, and $17 billion more than Snap. And on Tuesday, the company announced its fourth stateside executive hire, a key part of its overall plan to strengthen leadership ties in the U.S.