TikTok considering splitting from China's ByteDance if deal with US fails: report

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China’s TikTok is considering separating from parent ByteDance to help address U.S. concerns about national security risks, Bloomberg News reported Tuesday.

A divestiture, which could result in a sale or initial public offering, is considered a last resort, and to be pursued only if the company’s existing proposal with U.S. national security officials does not get approved, Bloomberg reported, citing people familiar with the matter.

"We remain confident that the best path forward to addressing concerns about national security is transparent, U.S.-based protection of U.S. user data and systems, with robust third-party monitoring, vetting and verification," a TikTok spokesperson told Fox News Digital in a statement. "If protecting national security is the objective, calls for a ban or divestment are unnecessary, as neither option solves the broader industry issues of data access and transfer."

The Chinese government has made investments in two of the nation's most significant technology firms: ByteDance, the Chinese company that owns global video app TikTok, and Weibo, China's version of Twitter, in a move apparently intended to bolster it (AP Photo/Kiichiro Sato, File / AP Newsroom)

Last year, the short-form video app agreed to undergo a national security review by the Committee on Foreign Investment in the United States (CFIUS). Under the plan, known as Project Texas, TikTok agreed to bring in Oracle Corp. to host U.S. user data and review its software, as well as appointing a three-person government-approved oversight board.

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CFIUS has stalled in its process, leaving TikTok unsure of whether its plans will be sufficient to continue operating in the country. Members of CFIUS from the Justice Department have been unwilling to accept TikTok's proposal, Bloomberg reported.

U.S. lawmakers are growing increasingly hostile toward TikTok. (Drew Angerer/Getty Images / Getty Images)

Despite TikTok's attempts to convince lawmakers and regulators that the short-form social media platform is secure and safe, technology experts and lawmakers remain skeptical.

"ByteDance's purported backup plan of divesting from TikTok is nothing more than a distraction intended to derail the growing momentum towards a nationwide ban on the application." Jake Denton, a research associate at Heritage’s Tech Policy Center, told Fox News Digital. "Since President Trump's attempt to ban TikTok in 2020, the company has persistently misled the American people and our lawmakers regarding its business practices, all to ensure their continued presence in the United States."

"This is more of the same from the China-based company." Denton added. "Our lawmakers should disregard the attempts of TikTok’s lobbyists to further delay what needs to be done. A nationwide ban on the application is the only viable option."

Despite TikTok's attempts to convince lawmakers and regulators that the short-form social media platform is secure and safe, technology experts and lawmakers remain skeptical. (Fabian Sommer/picture alliance via Getty Images / Getty Images)

The popular social media app has faced continual scrutiny from lawmakers who are concerned that ByteDance may be forced to share data with the Chinese government or could be used as an influence tool by China. Republican and Democratic lawmakers have proposed multiple bills that call for banning the video-sharing app or selling it.

TikTok CEO Shou Chew has been asked to testify before a House committee about the app’s data privacy and security practices and the company’s relationship with the Chinese Communist Party.

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Recently, Republicans on the House Foreign Affairs Committee passed a bill that would give the Biden administration new power to ban TikTok and other apps deemed to pose a national security risk. The committee advanced the legislation on a 24-16 vote that went along party lines. It’s unclear when the bill may reach the House floor for a vote.

Federal agencies are in the process of deleting TikTok from government devices as required by a provision of the $1.7 trillion omnibus spending bill enacted in December that originally passed the Senate when it was introduced by Sen. Josh Hawley, R-Mo., as a standalone bill.

Republican and Democratic lawmakers have proposed multiple bills that call for banning the video-sharing app TikTok or selling it. (AP Photo / Fox News)

The law required the Biden administration’s Office of Management and Budget to provide guidance for agencies to implement the No TikTok on Government Devices Act by Feb. 27. The Office of Management and Budget (OMB) released its guidance on Feb. 27, which gives agencies 30 days to remove or block TikTok and develop limited exceptions for law enforcement or national security interests as permitted by the law.

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TikTok and ByteDance did not immediately respond to Fox News Digital's requests for comment.

Fox News' Paul Best contributed to this report.