Amid concerns that the popular video app poses a security threat, TikTok was urged to part ways with its Chinese owners to avoid a national ban in the United States.
The United States has threatened to ban TikTok in the country unless the social media company's Chinese owners, ByteDance, sell their stakes in the video-sharing app.
TikTok confirmed a Wall Street Journal report that the Committee on Foreign Investment in the US (Cfius) told the popular video-sharing app to part ways with ByteDance to avoid a US ban.
It is the first time under the administration of President Joe Biden that a potential ban on TikTok has been threatened.
His predecessor, Republican Donald Trump, had tried to ban TikTok in 2020 but failed.
TikTok under scrutiny
Western officials have become increasingly concerned about the potential that ByteDance could pass on data to China's government.
The company has consistently denied sharing data with Chinese officials.
Late last month, the White House gave all federal agencies 30 days to wipe TikTok off all government devices.
The European Commission, Canada, and Australia have banned the app from their government phones.
But the US has also taken a step that would make a complete ban easier.
Lawmakers from both parties in Congress have been working on legislation that would give the Biden administration more power to clamp down on TikTok.
Last week White House national security adviser Jake Sullivan praised the move, saying it "would empower the United States government to prevent certain foreign governments from exploiting technology services... in a way that poses risks to Americans' sensitive data and our national security," he said.
TikTok Chief Executive Shou Zi Chew was due to appear before the US Congress next week.
TikTok says divestment won't ensure security
"If protecting national security is the objective, divestment doesn't solve the problem: a change in ownership would not impose any new restrictions on data flows or access," TikTok spokesperson Maureen Shanahan said.
"The best way to address concerns about national security is with the transparent, US-based protection of US user data and systems, with robust third-party monitoring, vetting, and verification, which we are already implementing," she added,
The company has been working with the US for nearly two years to address national security concerns. It said it has spent more than $1.5 billion (€1.4 billion) on rigorous data security efforts.
TikTok claims it has more than a billion users worldwide, including over 100 million in the US, including two-thirds of the country's teenagers.
Users already spent more time on TikTok than on YouTube, Facebook, Instagram, or Twitter. According to market tracker Insider Intelligence, it is fast catching up with streaming giant Netflix.