TikTok has been hit by China's worsening diplomatic relations around the world, with calls to ban the mobile app which features an unending loop of 15-second videos of users lip syncing and dancing and has an estimated 1.6 million users in Australia.

TikTok is currently facing two federal inquiries. A Senate committee has asked TikTok, Facebook, Twitter and Google to give evidence on the threat of foreign interference conducted through their platforms.

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Separately, security agencies are assessing the platform after Prime Minister Scott Morrison said he was looking "very closely" at TikTok.

The government holds concerns the platform could be used to compile a vast digital database of users that could be shared with the Chinese Communist Party.

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The security agency informed probe is also expected to examine Chinese apps WeChat and Weibo.

James Cameron, partner at venture capital firm Airtree Ventures, said the security concerns about TikTok would definitely be less under Microsoft's ownership.

Mr Cameron said TikTok was heavily dependent on ByteDance's infrastructure, including hosting and sharing data with its parent company and potentially the Chinese government.

"That's the really challenging part with TikTok and I think unwinding that infrastructure is going to take time," Mr Cameron said. "It's going to take very large engineering assets and so, if you want to be bought by anybody you want it to be bought by someone who has the capacity to unwind that infrastructure as quickly as possible and Microsoft clearly has that."

Mr Cameron said Microsoft had one of the biggest development teams anywhere in the world and so would be able to unwind TikTok's infrastructure faster than most companies.

"There are potential concerns that you're just handing over one foreign government's control over the data for another and I have some sympathy for that argument," he said.

Mr Cameron said the United States government would have more checks and balances and oversight around how the government deals with big technology companies.

"It has a rule of law that I think most Australian legislators will be more comfortable with," Mr Cameron said.

The Indian government announced in July it would ban TikTok and other well-known Chinese apps, including WeChat, saying they posed a "threat to sovereignty and integrity". The decision followed a rise in tensions between Beijing and Delhi over a series of military clashes in the Himalayas.