Microsoft CEO Satya Nadella has said the vendor is in talks to buy the US operation of TikTok "following a conversation with President Trump".
Rumours of the shock move first surfaced last week, but Nadella confirmed takeover discussions via a blog post.
"Microsoft fully appreciates the importance of addressing the president's concerns," he said.
"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."
A potential acquisition had thought to be in jeopardy when Trump said on Friday that he could ban TikTok in the US entirely, with the firm's parent company, ByteDance, based in China.
But Microsoft has said that the data of all American users would be moved to the US if a deal is completed. The deal would also include TikTok's operations in Australia, Canada and New Zealand.
Nadella added that Microsoft may invite other US-based investors to join the deal on a minority basis.
"Microsoft appreciates the US Government's and President Trump's personal involvement as it continues to develop strong security protections for the country," the CEO said.
Meanwhile secretary of state Mike Pompeo has said that the president will take action against Chinese-owned software companies over the coming days, the BBC has reported.
He claimed that TikTok has been "feeding data directly" to the Chinese government.
No potential valuations for the deal have been made public, but Reuters reported that investors value the entire TikTok business at $50bn.
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