President Donald Trump has set a deadline of September 15 for TikTok's US unit to be sold to an American company, threatening to shut it down otherwise.
He also demanded a substantial cut for the US government from the sale of the popular Chinese-owned video app.
"I think a deal is going to be made, it's a great asset, it's a great asset, but it's not a great asset in the United States, it doesn't have the approval of the United States," Trump said on Monday at the White House.
"So it will close down on September 15, unless Microsoft or someone 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, a lot of money."
Trump said he made the demand in a phone call at the weekend with the head of Microsoft, which has confirmed that it is in talks to buy TikTok in the United States.
In a blog post published on Sunday, the company said that discussions to acquire the video-sharing app would continue following a conversation between Microsoft CEO Satya Nadella and President Trump.
This came after the president on Friday threatened to ban the app within the United States with administration officials expressing security concerns in recent weeks.
Microsoft said that it was committed to acquiring TikTok "subject to a complete security review and providing proper economic benefits to the United States," adding that the company would ensure that "all private data of TikTok’s American users is transferred to and remains in the United States".
The company said that it expected talks to end no later than September 15 with TikTok-owner ByteDance. The deal would see Microsoft taking ownership of the platform in the United States, Canada, Australia, and New Zealand.
"Microsoft appreciates the U.S. Government’s and President Trump’s personal involvement as it continues to develop strong security protections for the country," Microsoft said.
The talks between Microsoft and ByteDance come as geopolitical tensions between China and the United States continue to simmer.