President Trump issued executive orders that will effectively ban TikTok, the popular Chinese-owned short video app, from the U.S. market from mid-September.
TikTok is a social networking app for sharing short user-produced video clips, popular, particularly among teenagers, with an estimated 100 million active users in the United States alone and many more around the world.
President Trump has railed against TikTok and its ties to China, arguing that the short-form video app should be banned from the U.S. market due to national security concerns and that it could share data about its users with the Chinese government, something ByteDance has denied doing.
The growth of mobile apps developed and owned by Chinese firms "threatens the national security, foreign policy, and economy of the United States", President Trump says.
The order would effectively ban TikTok from operating in the US if ByteDance doesn't sell the app. Trump also recently ordered ByteDance to sell TikTok's US operations within 90 days in a separate executive order.
Several companies have already expressed interest in purchasing TikTok at one point or another.
Microsoft is the leading contender to purchase TikTok’s service in the US, Canada, Australia, and New Zealand. Negotiations could be completed by Sept. 15, which is before the deadline of the executive orders.
In an interview with Wired, Microsoft co-founder Bill Gates has described a potential deal with TikTok as a "poisoned chalice," adding that "being big in the social media business is no simple game."
Oracle has also entered the race to acquire TikTok. The tech company co-founded by Larry Ellison had held preliminary talks with TikTok’s Chinese owner, ByteDance, and was seriously considering purchasing the app’s operations in the U.S., Canada, Australia and New Zealand, the same assets that Microsoft has publicly said it is negotiating to acquire.
That puts Oracle against Microsoft, which has been racing to finish its negotiations ahead of the Sept. 15 deadline. Twitter was also rumored to have held preliminary deal talks.
Microsoft shares closed just over half of 1% higher on Tuesday and are up 34% year to date. Oracle shares are up just 4% for the year.
Additionally, the Financial Times noted that Microsoft has also seriously considered a bid to take over TikTok's global operations beyond those countries. However, ByteDance is opposed to selling any assets beyond those in the U.S. Canada, Australia and New Zealand.
While ByteDance hasn’t named a price for its sale publicly, TikTok’s success led the company to become the world’s most valuable startup in 2018.