Microsoft’s Nadella Says Failed TikTok Deal Was ‘Strange’

Microsoft’s CEO Satya Nadella has opened up about President Trump and his national security efforts to separate the US version of TikTok from its Chinese parent ByteDance.

President Trump was not afraid of citing national security reasons for clampdowns on Chinese companies. And in 2020, he turned his attention to TikTok, owned by Chinese firm ByteDance.

The Trump administration ordered ByteDance to divest TikTok to a US buyer as part of an order from the Trump administration.

TikTok background

On 6 August 2020 President Trump signed an executive order to prohibit US companies from carrying out TikTok-related deals with ByteDance after 45 days (on 15 September 2020).

The executive order against TikTok (and WeChat owner Tencent) was because the US believed they posed a national security risk because the apps collected data on users, which “threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information.”

ByteDance sued the US government over the executive order, and the US courts eventually blocked President Trump’s order and it never took effect.

In the meantime however ByteDance was engaged in talks with a number of potential American acquirers including Microsoft, Walmart, Oracle and Twitter.

ByteDance opted to reject Microsoft’s approach, and instead revealed a partnership deal with Oracle and Walmart.

In January President Trump left office after losing the US Presidential election to Joe Biden,

In February US President Joe Biden announced that TikTok’s purchase by Oracle and Walmart had been halted indefinitely.

And then in June 2021 Biden withdrew a series of executive orders signed by President Trump, that targetted Chinese firms.

However, a separate US national security review of TikTok, that began in late 2019, remains ongoing.

Strangest thing

Now CEO Satya Nadella has admitted on Monday that Microsoft’s near-acquisition ofTikTok was the “strangest thing I’ve ever worked on.”

According to Reuters, Nadella was speaking at the Code Conference in Beverly Hills, California.

At the event Nadella said he was looking forward to bringing Microsoft’s security, child safety and cloud expertise to TikTok.

“It’s unbelievable,” Nadella said of the experience during an on-stage interview. “I learned so many things about so much and so many people. First of all, TikTok came to us. We didn’t go to TikTok.”

“TikTok was caught in between a lot of things happening across two capitals,” Nadella continued. “President Trump had a particular point of view of what he was trying to get done there, and then it just dropped off. The (US. government) had a particular set of requirements and then it just disappeared.”

Nadella said what attracted ByteDance CEO Zhang Yiming to Microsoft was the US company’s services related to content moderation and child safety, developed through products included in Xbox video gaming tools and on business social network LinkedIn.

ByteDance did not immediately respond to a request for comment.

Nadella said he has no idea whether the US is still pushing for a deal under President Joe Biden. The Biden administration has said it is reviewing the national security concerns.

“At this point, I’m happy with what I have,” Nadella said.

Nadella also reportedly expressed support for greater government regulation of cryptocurrency rules, which could stifle ransomware attacks since the ransoms often flow through opaque systems.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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