TikTok negotiation 'strangest thing I've ever worked on,' says Microsoft's Satya Nadella

This time last year, ByteDance was trying to save its TikTok app in the US and elsewhere after Donald Trump's administration threatened to ban it. One potential savior was Microsoft, which had negotiated to acquire the app in the US, Canada, Australia and New Zealand, but lost its bid to Oracle. At the Code conference, CEO Satya Nadella offered new details on the negotiation, telling journalist Kara Swisher it was "the strangest thing I've ever worked on," Geekwire reports.

It was a chaotic series of events that started when Trump threatened to force Chinese company ByteDance to sell TikTok to a US owner, citing privacy and security concerns. Microsoft stepped in as a potential buyer, though the company in the end struck a deal with Oracle and Walmart that was scrapped by President Joe Biden's administration in February 2021.

TikTok originally came to Microsoft, Nadella emphasized, seeking a cloud and security partner to help it pilot the delicate political landscape between China and the US. "That's kind of how it started," he said. "But I was pretty intrigued. I must say, it's a great property. Obviously, everyone has seen that growth and what have you, and I guess the rest is history."

In fact, just yesterday, TikTok reached a billion users and did so in less than four years. For perspective, it took Instagram almost eight years after its initial release and nearly six years after it was acquired by Facebook in 2012 to pass the one-billion user threshold.

President Trump, I think had sort of a particular point of view on what he was trying to get done there, and then just dropped off,” he said. “I mean, it was interesting. There was a period of time when I felt that the [administration] had some particular set of requirements, and then they just disappeared.

Swisher persisted with the subject, asking Nadella about Microsoft's negotiations with Trump. “President Trump, I think had sort of a particular point of view on what he was trying to get done there, and then just dropped off,” he said. “I mean, it was interesting. There was a period of time when I felt that the [administration] had some particular set of requirements, and then they just disappeared.”

In fact, Microsoft was in the middle of negotiations with ByteDance when Trump dropped a bomb, telling reporters that he'd rather ban the app than allow it to be sold to a US company, according to a book by Microsoft President Brad Smith. That "threw into disarray the careful negotiations we had pursued with ByteDance” to buy TikTok’s business in the U.S. and the three other countries, he wrote. Trump only relented and allowed a deal to happen after Nadella called him personally.

After Oracle's winning bid, ByteDance said that Trump had "ghosted" the site, effectively going silent after ordering the company to divest its US TikTok assets.

Though it came away empty-handed, Microsoft did learn a few things about complex foreign negotiations around tech. "It’s possible to run a foreign technology service in a domestic data center with strict security, privacy, and digital safety controls in a manner that provides appropriate transparency to local government officials," said Smith.