How TikTok’s talks with Microsoft turned into a soap opera

When Microsoft began talking this summer with popular video app TikTok and its Chinese parent company, ByteDance, no one had any intentions of pursuing a blockbuster deal.

With tensions swirling between the United States and China, along with the complexities of running a social media company, any large acquisition appeared too treacherous to navigate. So Microsoft discussed taking a small stake in TikTok and becoming one of the app’s minority investors, said four people briefed on the conversations.

Even a small deal would be a win-win, the thinking went.

For Microsoft, a minority investment would potentially bring TikTok over to using its Azure cloud computing service, immediately making the app one of Microsoft’s biggest cloud clients, said the people, who declined to be identified because the details are confidential.