Vole threw its hat in the ring on Sunday after President Donald Trump reversed course on a planned ban of Tiktok and gave the two firms 45 days to come to a deal.
The proposed acquisition of parts of TikTok, which boasts 100 million US users, would offer Microsoft a rare opportunity to become a major competitor to social media giants such as Facebook and Snap.
Microsoft, which also owns the professional social media network LinkedIn, is also seeking to buy TikTok’s Canadian, Australian, and New Zealand interests.
ByteDance has not publicly confirmed the news. But in an internal letter to staff, the company’s founder and CEO Zhang Yiming said the firm had started talks with a tech company that was not identified.
The letter also said ByteDance did not agree with the stance taken by the Committee on Foreign Investment in the United States (CFIUS) that it must fully divest TikTok’s US operations.
“We disagree with this CFIUS conclusion”, the letter said but added: “...we understand the decision in the current macro environment”.
Trump had said on Friday he was planning a ban amid concerns that its Chinese ownership represents a national security risk because of the personal data it handles.
He only agreed to allow Microsoft to negotiate a deal if it could secure a deal in 45 days.