TikTok will reportedly open a London HQ in a move approved by ministers risking a major row with Donald Trump over the Chinese app.
The investment is set to be unveiled next week by ByteDance, who own the popular social media platform, as reported by The Sun.
However the move risks opening up a rift with the US who have accused the company of passing personal data to Chinese government.
US President Trump said on Friday he would soon ban TikTok in the United States, and critics have claimed users' personal data could be at risk.
Secretary of State Mike Pompeo said on Sunday that Trump would take action on what he sees as a broad array of national security risks presented by firms connected to the Chinese government.
US President Trump said on Friday he would soon ban TikTok in the United States
US President Trump said on Friday he would soon ban TikTok in the United States
He said: 'These Chinese software companies doing business in the United States, whether it's TikTok or WeChat - there are countless more ... are feeding data directly to the Chinese Communist Party, their national security apparatus,' Mr Pompeo told the Fox News Channel.
'Could be their facial recognition patterns. It could be information about their residence, their phone numbers, their friends, who they're connected to. Those - those are the issues that President Trump has made clear we're going to take care of,' he said.
What is TikTok?
TikTok is a Chinese social media app where users can live stream, create short videos and music videos and Gifs with a host of functions.
TikTok's tagline is 'Make every second count'.
It was the most downloaded app in the US in 2018 and the world's fourth most downloaded app in 2018, ahead of Instagram and Snapchat.
In 2019, it became the second-most downloaded app globally behind Whatsapp.
TikTok is known in China as Douyin where it was launched in 2016 and then made more widely available around the world in 2017.
Douyin is still the version of the app used in China, available to download separately to TikTok.
Most children use the app to film themselves lip-syncing to chart hits.
It offers users a raft if colourful modification and editing tools including overlaying music, sound, animated stickers, filters and augmented reality (AR) for creating short videos.
The Beijing based social network has more than 500 million active users and the company is now worth more than $75 billion (£58 billion).
TikTok's US user data is stored in the US, with strict controls on employee access, and its biggest investors come from the US, the company said on Sunday.
'We are committed to protecting our users' privacy and safety as we continue working to bring joy to families and meaningful careers to those who create on our platform,' a TikTok spokesperson said.
As speculation grew over a ban or sale of the social media's US business, TikTok posted a video on Saturday saying: 'We're not planning on going anywhere.'
Microsoft confirmed on Sunday night it is in talks with Chinese company ByteDance, which owns TikTok, to acquire the US arm of the popular video app.
Microsoft also said it had discussed with Mr Trump his concerns about security and censorship surrounding such an acquisition.
In a statement, Microsoft said it and ByteDance had provided notice of their intent to explore a deal resulting in Microsoft owning and operating the TikTok service in the US, Canada, Australia and New Zealand.
President Donald Trump is understood to have agreed to give China’s ByteDance 45 days to negotiate the sale of TikTok to Microsoft, sources said.
'Microsoft fully appreciates the importance of addressing the President's concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury,' the Microsoft statement said.
Its parent company, Bytedance Ltd, launched TikTok in 2017. It bought Musical.ly, a video service popular with teens in the US and Europe, and combined the two. It has a similar service, Douyin, for users in China.
But TikTok's Chinese ownership has raised concern about the potential for sharing user data with Chinese officials as well as censorship of videos critical of the Chinese government.
TikTok says it does not censor videos and it would not give the Chinese government access to US user data.
The TikTok office in Culver City. US President Trump has said he would ban the company from the US
'The President, when he makes his decision, will make sure that everything we have done drives us as close to zero risk for the American people,' Mr Pompeo said.
'That's the mission set that he laid out for all of us when we get - we began to evaluate this now several months back. We're closing in on a solution. And I think you will see the president's announcement shortly.'
The debate over TikTok parallels a broader US security crackdown on Chinese companies, including telecom providers Huawei and ZTE.
HOW DOES TIKTOK WORK?
- Users post videos of themselves and broadcast them on the app
- Anyone can find these videos and post comments on them; it also allows you to message that person privately
- Some of the most popular videos are watched more than 10 million times
- Each TikTok video is generally 15 to 60 seconds long
- The videos are typically set to music, often showing the user dancing, doing a trick, or lip-syncing
The Trump administration has ordered that the US stop buying equipment from those providers to be used in US networks.
Mr Trump has also tried to steer allies away from Huawei over concerns the Chinese government has access to its data, which Huawei denies.
Earlier this week TikTok pushed back at what it called 'maligning attacks' that call attention to the video app's Chinese connections.
TikTok CEO Kevin Mayer said the attacks were 'disguised as patriotism and designed to put an end to our very presence in the U.S.'
'We are not political, we do not accept political advertising and have no agenda -- our only objective is to remain a vibrant, dynamic platform for everyone to enjoy,' Mayer said.
'TikTok has become the latest target, but we are not the enemy.'
As relations between the United States and China deteriorate over trade, Hong Kong's autonomy, cyber security and the spread of the novel coronavirus, TikTok has emerged as a flashpoint in the dispute between the world's two largest economies.
It comes as a leading expert said the banning of the app in Australia is 'inevitable'.
Professor Clive Hamilton told Daily Mail Australia the Communist Party uses the app to keep tabs on anyone who criticises the totalitarian regime.
He fears that users' personal data is likely being sent to Beijing.
'Chinese authorities are already monitoring TikTok usage particularly for people who are of interest,' he said.
'That creates a real problem for freedom of expression and for the protection of intrusion from the Chinese State.'
The Australian Defence Force already banned its personnel from downloading the app on their phone earlier this year and it now appears likely a blanket ban will go into action for all Australians.
'I expect the Australian government to take a lot of interest in TikTok and the way the Chinese regime is using TikTok to monitor people in the west,' Prof Hamilton said.
'I think it is only a matter of time before western governments realise the extent of surveillance that Beijing has undertaken through social media platforms including TikTok.
'I think the banning of TikTok is inevitable.'
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