A possible sale of TikTok's Chinese-owned U.S. activities to Microsoft is reportedly suspended after Donald Trump promised to ban the video sharing app.
A sale was considered almost consensual, but was questioned after the U.S. President's warning on Friday.
The Wall Street Journal said Microsoft has now interrupted the talks, although TikTok owner ByteDance has made the final effort to gain White House support.
It comes amid criticism of Mr. Trump's threat as an attack on freedom of expression.
The popularity of the short form video app has increased. TikTok has approximately half a billion active users worldwide – and approximately 80 million in the United States – a large proportion of whom are in their teens or early 20s.
However, some U.S. politicians are concerned that the app's Chinese owner, Bytedance, poses a national security risk as the app could be used to collect Americans' personal information. Regulators have also raised their own safety concerns.
Late Friday, Trump told Air Force One reporters: "As for TikTok, we're banning them from the United States."
In a statement on Saturday, a White House spokesman said, "The government has very serious national security concerns about TikTok. We continue to evaluate future policies."
The Wall Street Journal said Bytedance had attempted to make significant concessions to the White House, including creating thousands of jobs in three years.
A sale of the U.S. business to Microsoft, which owns LinkedIn, would give the U.S. technology giant a far greater presence in rival-dominated social media. TikTok's US arm was valued at $ 15-30 billion (£ 11-23 billion).
According to the Financial Times, some executives at ByteDance believe that Mr. Trump's intervention may just be a bargaining chip to help Microsoft do better business.
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Media signatureWATCH: Is TikTok banned?
TikTok declined to discuss the possible Microsoft deal, but a spokesman said in a statement on Sunday: "Although we do not comment on rumors or speculation, we are confident that TikTok will be successful in the long term."
The statement repeated that the company is committed to protecting the privacy and safety of users.
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The move to ban TikTok comes at a time of increasing tension between the Trump administration and the Chinese government over a number of issues, including trade disputes and Beijing's handling of the coronavirus outbreak.
The president's announcement on Friday was criticized by some in the technology space, including former Facebook security chief Alex Stamos, who questioned whether the move was spurred by national security concerns.
He tweeted: "This is going to be bizarre. A 100% sale to an American company two weeks ago would have been viewed as a radical solution and would ultimately mitigate all reasonable privacy concerns. If the White House removes this, we know that it is not . " about national security. "
Mr. Trump has also been criticized by the American Civil Liberties Union. "Banning an app that allows millions of Americans to communicate with each other poses a threat to freedom of expression and is technologically impractical," said Jennifer Granick, ACLU surveillance and cyber security consultant.
"Shutting down a platform, even if legally possible, affects freedom of expression online and does not help solve the broader problem of unjustified government surveillance," she said in a statement.
To reassure TikTok's millions of US users, Vanessa Pappas, the country's managing director said in a video message on Saturday: "We're not going anywhere … We're here in the long run.
"When it comes to security, we build the safest app because we know it's the right thing, so we appreciate the support."