What you need to know
- Microsoft could face technical challenges when trying to purchase parts of TikTok.
- A new report explains several hurdles, most of which center around data usage and storage.
- President Trump reportedly set a deadline of September 15 to have a blueprint for the acquisition.
Microsoft could face several challenges when attempting to purchase parts of TikTok. A new report from Reuters highlights several hurdles that Microsoft would have to get over, many of which center around having to keep data from different apps and regions separate.
According to sources familiar with the situation that spoke with Reuters, President Trump has set a deadline of September 15 for Microsoft to create a blueprint for an acquisition of TikTok. The blueprint needs to outline a plan that safeguards the personal data of Americans that is stored within TikTok, according to Reuters. If a there is no deal in place by the September 15 deadline, President Trump will reportedly ban the acquisition.
Reuters reported earlier this month that Microsoft is negotiating a transition period that will allow the company to ringfence TikTok technologically from ByteDance after the two companies agree to a deal.
According to sources that spoke with Reuters, a clean break of the two entities could take a year or more. While ByteDance reportedly started work on separating TikTok from other technologies several months ago, there are still several complicating factors.
Even though the code for the TikTok app itself has been separated from the ByteDance-owned Douyin, TikTok's code is still partially shared across multiple ByteDance products, according to Reuters sources. That shared server code is needed for storing data, using algorithms, and moderating and recommending content.
Cyber security expert Ryan Speers told Reuters that Microsoft would likely need to rely on ByteDance's code while it shifted TikTok to a new back-end infrastructure. During this transition period, Microsoft would have to review and revise code.
This setup could pose a challenge for Microsoft, as the Committee on Foreign Investment in the United States (CFIUS) could reject a plan which involves a U.S. business relying on the technology of ByteDance after the sale of TikTok.
Using TikTok's algorithms could prove challenging for Microsoft as well. While the algorithms that power TikTok's "For You" page are separate from Douyin, according to two sources that spoke with Reuters, but the algorithms aren't as valuable without data being fed into them. This issue is complicated further if regional versions of TikTok needed to be separated from other regional versions of TikTok.
While these issues do not rule out an acquisition by Microsoft, they form a set of obstacles that would be difficult to navigate.