President Trump reiterated on Monday afternoon that he's fine with Microsoft or another American tech company buying TikTok, but he said that a "large percentage" of the sale should go into the U.S. Treasury.
USA officials have said TikTok poses a national risk because of the personal data it handles.
China had "limited ability" to provide protection to these Chinese companies by retaliating against US companies because the United States had technological superiority and influence with its allies, it added.
In ByteDance's proposal, it suggested that Microsoft could be in charge of protecting all of TikTok's US user data.
Republican senator Lindsey Graham commented: "What's the right answer?"
"To the extent that any such data is now stored or backed-up outside the US, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred", the company said. "Win-win. Keeps competition alive and data out of the hands of the Chinese Communist Party".
He also suggested the US Treasury could receive part of the earnings of the acquisition for "facilitating" the deal.
Trump was speaking to reporters at a White House news conference on Monday, hours after it announced the deadline for TikTok to stop operations in the US.
CFIUS, or the Committee on Foreign Investment in the United States, opened a review past year of the Musical.ly purchase that led to TikTok's creation. "Who's going to get the name, the name is hot". "How do you do that if it's owned by two different companies?"
In a statement, Microsoft said it and ByteDance have provided notice of their intent to explore a deal that would result in Microsoft owning and operating the TikTok service in the U.S., Canada, Australia and New Zealand.
Klein added it "will close down on September 15 unless Microsoft or somebody else is able to buy it and work out a deal, an appropriate deal, so the Treasury. of the United States gets a lot of money".
U.S. Secretary of State Mike Pompeo said over the weekend that Trump would take action shortly against Chinese software companies that shared user data with the Chinese government.
In addition to the various security measures, Microsoft said it would ensure that all private data of TikTok's American users is transferred to the US. "These discussions are preliminary and there can be no assurance that a transaction which involves Microsoft will proceed".
"It is extraordinary behaviour as well because last week we had lawmakers in the U.S. trying to look at whether tech companies are too big and now we've got Trump trying to make one of them even bigger so it is a really, really freakish situation to be in", she told the BBC's Today programme. "People have high expectations of a company founded by a Chinese person which is going global but have little information about it".
On Monday China's foreign ministry said it strongly opposed any US actions against Chinese software companies, and it hoped the USA could stop its "discriminatory policies".