A16 N THE NEW YORK TIMES NATIONALMONDAY, AUGUST 3, 2020 K
Microsoft said on Sunday that it
would continue to pursue the pur-
chase of TikTok in the United
States after consulting with Presi-
dent Trump, clearing the way for
a potential blockbuster deal be-
tween the software giant and the
viral social media phenomenon.
The announcement came as Mr.
Trump has expressed repeated
concerns about TikTok and na-
tional security in recent weeks be-
cause of the app’s Chinese origins
and backing; on Friday, Mr.
Trump threatened to ban the app
entirely within the United States,
saying any decision could come as
soon as Saturday.
Those plans appeared to
change after several of Mr.
Trump’s allies and Satya Nadella,
the chief executive of Microsoft,
spoke over the weekend with the
president.
“Microsoft fully appreciates the
importance of addressing the
president’s concerns,” the com-
pany said in a statement. “It is
committed to acquiring TikTok
subject to a complete security re-
view and providing proper eco-
nomic benefits to the United
States, including the United
States Treasury.”
Microsoft said it would pursue
the deal over the coming weeks,
and expected to complete the dis-
cussions no later than Sept. 15.
Such a deal would involve pur-
chasing the TikTok service in the
United States, Canada, Australia
and New Zealand; ByteDance,
the parent company of TikTok,
would continue to own the social
media app’s operations in Beijing
and other markets.
Microsoft may also bring on a
series of outside investors, which
would hold minority stakes in any
deal. In recent weeks, investors
from Sequoia Capital, SoftBank
and General Atlantic have all held
talks with TikTok to discuss par-
ticipating in an acquisition of the
company, according to two people
familiar with the discussions.
Such a deal would be a boon for
the Redmond, Wash.-based
Microsoft, which has pursued cor-
porate and enterprise computing
lines of business under the leader-
ship of Mr. Nadella, who took over
as chief executive in 2014. Though
it has dabbled in consumer acqui-
sitions — Microsoft purchased
Minecraft in 2014 and bought
LinkedIn in 2017 — the purchase
of TikTok would be largely new
ground for Mr. Nadella. More than
800 million people regularly use
the app to watch viral videos, with
some 100 million of those users in
the United States.
Acquiring TikTok would also pit
Microsoft directly against social
media titans like Twitter, Pinter-
est, Reddit and the mighty Face-
book, the latter used by more than
three billion people regularly. All
of the companies compete for
user attention and billions in dig-
ital advertising dollars.
The forced sale is the latest in a
series of punitive actions the
Trump administration has taken
against China, which the presi-
dent blames for allowing the coro-
navirus pandemic to spread and
damage the American economy,
diminishing his re-election
chances. As the election nears,
Mr. Trump has increasingly chal-
lenged China over security, tech-
nology and commercial relations
in an attempt to persuade voters
that he will be tougher in taking
on Beijing than former Vice Presi-
dent Joseph R. Biden Jr.
But a ban on TikTok, which
could target its presence in the
Apple and Google app stores,
would come with other difficul-
ties, including irking millions of
young Americans who share viral
videos and dance clips on the
service. It also most likely would
prompt legal challenges, anger
prominent Republican lawmak-
ers and dismay the business com-
munity. Administration officials
emphasized on Sunday that as is
frequently the case with Mr.
Trump, no decision is final until
paperwork was signed.
Those tensions spilled into the
open over the weekend as Wash-
ington awaited a decision from
Mr. Trump.
Surrounded by few WhiteHouse aides on Friday night as he
returned to Washington aboard
Air Force One, Mr. Trump caught
several advisers by surprise when
he told reporters he planned to
“terminate” the ability of TikTok
to operate in the United States us-
ing emergency economic powers
or an executive order.
Several advisers were furious,
and suggested that Peter
Navarro, the top trade adviserwho often has Mr. Trump’s ear,
and other people in the president’s
inner circle had helped short-cir-
cuit the president’s approval of a
possible sale to Microsoft, accord-
ing to White House officials and
others close to the president.
Those who opposed the deal had
focused on the idea of punishing
China, not what could happen to a
popular platform. Mr. Navarro did
not immediately respond to a re-
quest for comment.
As the president played golf at
his club in Virginia on Saturday,
his advisers discussed how to per-
suade him to sign off on the Micro-
soft deal — and to convey the po-litical repercussions of simply
turning off a service for tens of
millions of people in the United
States, according to a person fa-
miliar with what took place.
Several people, including
Treasury Secretary Steven
Mnuchin, reached out to Senator
Lindsey Graham, Republican of
South Carolina and an informal
adviser to Mr. Trump, to ask him
to intervene. The Treasury De-
partment declined to comment on
Sunday.
After speaking with Microsoft
officials a few times, Mr. Graham
eventually tweeted about the
deal, saying that Mr. Trump was
“right to want to make sure that
the Chinese Communist Party
doesn’t own TikTok and most im-
portantly — all of your private
data.”
He added: “What’s the right an-
swer? Have an American com-
pany like Microsoft take over Tik-
Tok. Win-win. Keeps competition
alive and data out of the hands of
the Chinese Communist Party.”
The tweet caught Mr. Trump’s
eye, prompting a call between the
two in which Mr. Graham told the
president that he agreed that the
platform was a national security
risk, but he stressed the political
risks of banning the app.
Some of Mr. Trump’s closest po-
litical advisers, including Mr.
Mnuchin and Larry Kudlow, the
chief of the National Economic
Council, had also been urging the
president to allow a sale of TikTok.
In a bid to sway the president,several business leaders and
prominent Republican lawmak-
ers, including Senators John
Cornyn of Texas and Marco Rubio
of Florida weighed in on Sunday.
“I was among the first to warn
of danger posed by TikTok last
year,” Mr. Rubio wrote on Twitter
on Sunday. “As I have shared with
POTUS & @WhiteHouse if the
company & data can be purchased
& secured by a trusted U.S. com-
pany that would be a positive &
acceptable outcome.”
Myron Brilliant, the executive
vice president of the U.S. Cham-
ber of Commerce, tweeted Sun-
day that a sale would “be a good
solution that helps to address
some security concerns, strength-
ens the US #digitaleconomy, and
preserves an app enjoyed by mil-
lions of Americans.”
On Sunday, Mr. Trump spoke
with Microsoft officials after be-
coming convinced that he was
heading off a political issue and
solving a security risk, according
to a person familiar with what
took place.
If a deal ultimately material-
izes, any agreement would be con-
tingent upon strict data security
measures. Microsoft said that it
would ensure all private data of
American users would be trans-
ferred to and held on servers
within the United States. “To the
extent that any such data is cur-
rently stored or backed-up out-
side the United States, Microsoft
would ensure that this data is de-
leted from servers outside thecountry after it is transferred,” the
company said.
Such a deal would also be con-
tingent upon “providing proper
economic benefits to the United
States,” according to Microsoft’s
statement; one of those benefits
could include creating a number
of U.S. jobs as a result of the deal,
according to a person familiar
with the matter.
But the move is unlikely to
please all of Mr. Trump’s advisers.
Some of Mr. Trump’s most hawk-
ish advisers, including Mr.
Navarro, have objected to Tik-
Tok’s sale, seeing the moment as
an opportunity to push through
more expansive measures that
could curtail the influence of Chi-
nese apps more broadly.
Speaking on Fox News on Sat-
urday night, Mr. Navarro, a noted
China critic, criticized the at-
tempted acquisition, saying that
Microsoft was “the software that
the People’s Liberation Army and
Chinese government run on” and
that Microsoft helped China build
its Great Firewall.
“What this president and the
White House is going to be doing
is look at any kind of software that
sends the information for Ameri-
cans back to servers in China,” Mr.
Navarro said. “They’re going to
come under scrutiny.”Michael Crowley, David E. Sanger
and Alan Rappeport contributed
reporting.
ANNA MONEYMAKER FOR THE NEW YORK TIMESMicrosoft Will Continue
Pursuit to Buy TikTok
After Talking to Trump
This article is by Mike Isaac, Ana
Swansonand Maggie Haberman.
Any potential deal
would be contingent
upon strict measures
for data security.
President Trump had threat-
ened to ban the social media
app TikTok over national secu-
rity concerns, but that plan
seems to have changed after a
consultation with Satya
Nadella, the head of Microsoft.ANJUM NAVEED/ASSOCIATED PRESSTikTok is known mostly for
dance videos and comedic skits,
but that silliness can obscure two
facts: TikTok has become a pow-
erhouse in the entertainment in-
dustry and the primary platform
that music executives and talent
agents use to scout the next big
act. And, at the same time, espe-
cially as the election nears, the
app has become an information
and organizing hub for Gen Z ac-
tivists and politically minded
young people.
TikTok has had a fraught rela-
tionship with the United States
government for some time. Sev-
eral administration officials, in-
cluding the president, fear the app
is a security risk because its par-
ent company, ByteDance, is Chi-
nese, potentially giving Beijing
access to American user data. Tik-
Tok and ByteDance have vehe-
mently denied any relationship
with the Chinese government.
The president’s comments sug-
gesting he would shut down Tik-
Tok in the United States stalled
ByteDance’s negotiations to sell
the app to Microsoft as a way to
address the security concerns. On
Sunday, Microsoft said that it had
resumed talks after consulting
with the president, giving some
hope to users that the app would
survive.
Young users say TikTok is a cru-
cial outlet for education about cli-
mate change, systemic racism
and the Black Lives Matter move-
ment. The talk of a ban politicized
them further, with many TikTok-
ers believing Mr. Trump’s threats
were a direct response to their
campaigns against him.
“TikTok is to Black Lives Mat-
ter what Twitter was to the Arab
Spring,” said Kareem Rahma, 34,
a TikTok creator with nearly
400,000 followers on the app. Mr.
Rahma’s TikToks from the Black
Lives Matter protests in Minne-
apolis garnered tens of millions of
views. “I saw a lot of youth on the
ground TikToking the protests as
opposed to livestreaming, tweet-
ing or Instagramming,” he said.
“The conversations these kids are
having with each other are essen-
tial.”
In June, teenage TikTok users
claimed responsibility for inflat-
ing attendance expectations, lead-
ing to rows upon rows of empty
seats, for Mr. Trump’s rally in
Tulsa, Okla., after thousands of
them registered for tickets to the
event that they had no plans to re-
deem.
TikTok users have also waged
coordinated campaigns to rate Mr.
Trump’s businesses poorly on
Google, to spam online surveys
aimed at Trump supporters with
useless information and to dam-
age the Trump campaign’s e-com-
merce store by collecting in their
shopping baskets items they
never intend to buy.
Ellie Zeiler, 16, who has 6.3 mil-
lion followers on TikTok, said that
Mr. Trump’s threat to ban the app
may even sway more young peo-
ple to vote against him. “I think
that a lot of people didn’t like
Trump before, and this has driven
people to not like him even more,”
she said.
“For many kids, politics feel
very distant,” said Eitan Bernath,
18, who has 1.2 million followers on
TikTok. “This might be the first
time it hits home for a lot of kids.”
On Sunday, nine TikTok cre-
ators with a collective 54 millionfollowers, including Brittany
Broski, Hope Schwing and
Mitchell Crawford, published an
open letter addressed to Mr.
Trump on Medium.
“TikTok has enabled the kinds
of interactions that could never
take place on the likes of Facebook
and Instagram,” they wrote. “Our
generation has grown up on the
internet, but our vision of the in-
ternet is going to require more
than two gatekeepers. Why not
use this as an opportunity to level
the playing field?” they urged.
Vanessa Pappas, the general
manager of TikTok North Amer-
ica, attempted to quell concerns
on Saturday. “We’re not planning
on going anywhere,” she said in a
statement released on the app.The New Show BusinessThe TikTok creator Curtis New-
bill, 24, is one of thousands of
young creators who has found
fame through the app.When he walked into a friend’s
house in Los Angeles on Friday
night, his stomach sank. He was
there for a gathering with fellow
TikTok stars known as the Sway
Boys. “They were like, ‘Did you
hear about TikTok? It’s getting
banned,’ ” Mr. Newbill said.
Mr. Newbill’s next few hours
were a blur. He remained at the
gathering and tried not to think
about the situation, but a pit in his
stomach grew throughout the
night. He went live on the app,
telling his 4.3 million followers to
follow him on Instagram.
All night, Mr. Newbill fielded a
barrage of texts from concerned
family and friends. He stayed up
until 6:30 a.m., waiting for any in-
formation about his future.
Like thousands of other enter-
tainers who have made the pil-
grimage to Los Angeles in the
most recent West Coast entertain-
ment gold rush, Mr. Newbill relies
solely on income from TikTok to
make a living. “I live song deal tosong deal,” he said.
The loss of TikTok would upend
large swaths of the entertainment
industry that have just been com-
pletely reoriented around the app.
TikTok has rewritten the pop
charts, becoming a new default
for how labels and aspiring artists
promote their songs. And TikTok
is where major brands like Ameri-
can Eagle, Chipotle and others
spend millions to reach the next
generation of consumers.
“I’ve lost brand deals in the past
week,” Ms. Zeiler said. “They’re
saying, ‘We don’t want to do this
anymore.’ They’re worried if Tik-
Tok gets taken down, they’re not
going to get their full potential on
the deal.”
Management teams worked all
night on Friday to back up their
clients’ videos using FYP. RIP, a
tool that downloads users' TikTok
videos and emails them copies.
Several managers held confer-
ence calls with skittish brands
that were seeking to cancel deals.“We’re preparing for the worst,”
said Mario Ayuso, an influencer
manager.
“A lot of the newer talent I work
with began their career on TikTok
and it has been the foundation for
everything they know today,” said
Keith Dorsey, another talent man-
ager. “They are concerned, wor-
ried and somewhat freaked out.
One of them actually planned on
quitting his job tomorrow to take
his TikTok career to the next level.
Our group chats are on fire right
now.”Opening for CompetitorsIf the app’s potential shutdown
or instability around a sudden sale
has any silver lining, it’s a flood of
new users to smaller platforms.
Clash, a new short-form video app
founded by Brendon McNerney, a
former Vine star, became avail-
able on Friday night after the
news and shot up the app store
rankings on Saturday. Byte and
Dubsmash, two other short form
video apps, have also begun ac-
tively recruiting TikTok stars.
Last Wednesday, Triller, an app
that functions similarly to TikTok,
announced it had hired the 18-
year-old TikTok star Josh Rich-
ards as the platform’s chief strat-
egy officer, and successfully
wooed Mr. Richards along with
two other large TikTok stars, Grif-
fin Johnson, 21, and Noah Beck, 19,
to join the platform as investors.
Instagram is also offering Tik-
Tok creators deals of hundreds of
thousands of dollars to create con-
tent on Reels, its new product with
similarities, according to The Wall
Street Journal.
Perez Hilton, a longtime celeb-
rity news chronicler who has
amassed 850,000 followers on Tik-
Tok, said he hoped that just the
threat of a ban would serve as a
note of caution for the young tal-
ent on the app. “These influencers
on TikTok can’t have all their eggs
in one basket,” he said. “You have
to be everywhere,” he said, if you
want to stay famous.
“You need to hustle,” he said. “A
lot of the TikTokers that are just
pretty, those are the ones that are
really going to struggle. Pretty
doesn’t age well and it doesn’t
translate. The ones that are will-
ing to work on and off TikTok and
other platforms, they’re the ones
that will be able to continue to
thrive.”Trump’s Talk of a TikTok Ban Inflames Gen Z, Creators and Fans Alike
From Page ACurtis Newbill, 24, of Van Nuys, Calif., found fame on TikTok. He stayed up all night Friday, awaiting news that may affect his future.DAVID WALTER BANKS FOR THE NEW YORK TIMES‘For many kids, politics feel very distant. This might be the first time it hits home.’
EITAN BERNATH, 18, who has 1.2 million followers on TikTok
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