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An investment in TikTok could not only allow Reliance to make deeper connections with consumers but also help ByteDance allay concerns of the Indian government.
Chinese tech giant and TikTok parent company ByteDance is reportedly in talks with Reliance Industries Ltd., Indian multinational conglomerate. The companies are discussing investment in social media app TikTok and a potential deal for TikTok’s business in India.
The two companies began conversations in late July and have not yet reached an agreement.
Data Issues, TikTok Ban and Microsoft Involvement
It all started with the outbreak of the US-China trade war. Over time, the relationship between the nations has been worsening, and recently, the U.S. President Donald Trump administration announced plans to ban the TikTok and WeChat apps on the premise that they are capable of being used to gather data on Americans for use by Beijing.
Then, Microsoft Corporation (NASDAQ: MSFT) showed interest in buying the US operations of TikTok. In response, Trump suggested for a complete purchase, noting that part of the transaction would go to the US Treasury since it is making the deal possible. According to Microsoft, they have to complete the deal by September 15. If successful, TikTok will run under a new structure. As Microsoft has explained, the acquisition involves the app’s operations in the United States, Canada, Australia, and New Zealand. Besides, Microsoft hopes to allow American investors to participate in minority ownership of the company in this purchase. The sum of the deal is not yet clear, but it could be between $10 billion and $30 billion.
What about India?
India was TikTok’s largest market outside of China with over 200 million users. TikTok’s business in India is valued at more than $3 billion. In June, after border tensions with China, the government also banned TikTok and other 58 Chinese apps, for threatening its “sovereignty and integrity”.