Donald Trump appears optimistic about his ability to negotiate a deal that would bring TikTok under American control. This situation carries significant implications for the platform’s 170 million U.S. users, who eagerly await resolution after weeks of uncertainty.
According to the law, TikTok should have been banned in the United States by now.
Last year, the Biden administration required that the American operations of the Chinese video application either undergo a sale or confront a countrywide prohibition due to concerns about national security.
Legislators were worried about how the firm handles data from American users and potential interference from the Chinese government.
The concept of compelling ByteDance, which is owned by a Chinese entity, to divest and transfer ownership to a sanctioned non-Chinese proprietor garnered significant backing from both sides of Congress.
enacted by President Joe Biden
last April.
The federal legislation focuses on “foreign adversary-controlled applications,” explicitly naming TikTok and ByteDance. According to this definition, these entities cannot have more than 20% ownership by individuals or corporations from countries designated as “foreign adversaries”—a designation the U.S. has applied to China.
The legislation mandated that the company must dispose of its US operations by January 19, 2025, or face penalties.
supported by the Supreme Court
The deadline fell one day prior to Donald Trump’s second inauguration.
The TikTok countdown deadline
As the deadline in January loomed closer, the application was
briefly shut down
, but came back into play after Trump signed an executive order to allow more time for sale discussions.
Return to app stores not before February
.
The updated sales deadline is April 5th.
Up until now, ownership of the company hasn’t shifted. The Chinese authorities have openly opposed any sale and emphasized that the firm’s exclusive algorithm is considered critical technology that must remain within China.
Despite this, Trump has lately hinted at a potential sale. In March, the president informed journalists that the U.S. was engaged in talks with prospective purchasers.
“There are four distinct groups we’re handling here. Many individuals desire this, but ultimately, it rests upon my decision,” he stated, withholding their identities and further specifics.
He recently stated that an agreement would be unveiled prior to the most recent deadline. This marks a significant shift for Trump, who had previously been prepared to shut down TikTok in 2020 only to have his efforts thwarted by federal courts.
Who currently holds ownership of TikTok?
TikTok operates as a division under the privately-owned corporation ByteDance. As per data released by TikTok, around 60% of ByteDance’s shares are controlled by international investment firms. The remaining portion includes holdings: 20% belongs to the company’s founder, with another 20% attributed to ByteDance staff members.
Although these figures can’t be confirmed as the firm isn’t required to publish official statements, it appears that a significant portion of the company is already under foreign ownership outside of China.
Susquehanna International Group, a Pennsylvania-based trading and technology company, holds the largest external investment stake at 15%. One of the group’s co-founders, Arthur Dantchik, sits on ByteDance’s five-person board.
The other external investors currently include Sequoia Capital and General Atlantic, which have their headquarters in the U.S. William E. Ford, who serves as the CEO of General Atlantic, also sits on the ByteDance board.
Who might purchase TikTok next?
There have been widespread speculations about potential buyers interested in acquiring TikTok’s operations in the United States.
The mention of Steven Mnuchin, who previously served as Treasury Secretary under President Trump, continues to surface. During his tenure at the Treasury Department, he advocated for a potential TikTok sale in 2020. There has been speculation suggesting that the U.S. government might acquire a portion of the firm.
Other possible investors include Microsoft, the artificial intelligence company Perplexity AI, and consortia led by wealthy entrepreneurs like Frank McCourt or venture capital firm Andreessen Horowitz.
The private equity company Blackstone Group has come up as well. Its chief executive officer, Stephen Schwarzman, is a prominent supporter of Donald Trump and a major donor to the Republican Party.
One of the top contenders for orchestrating a potential buyout could be Oracle. This firm is already engaged with TikTok and demonstrated considerable interest in the company back when Trump was in his initial term as president.
Starting from 2020, Oracle has maintained US user data on local servers. This year, the company’s responsibilities have expanded to encompass additional data security measures aimed at ensuring adherence to US regulatory requirements.
What is Trump seeking from China?
It is hard to
assign a monetary value to TikTok
Given all the variables and uncertainties at present, particularly since the app’s algorithm isn’t included in the sale.
However, any of the present investors might boost their holdings or collaborate with one another to amplify their impact by injecting additional funds. Ultimately, this will hinge on the pricing, potential U.S. governmental intervention, and China’s approval of the transaction.
The president has said
tariff negotiations
It could be part of the agreement. Trump has already taken aim at China.
imports with 20% tariffs
in addition to their current responsibilities. If China allows a particular sale to proceed, he might decide to lower tariffs or postpone the implementation of increased tariff rates.
If a deal isn’t finalized shortly, Trump has stated he will prolong the deadline once more. Without this extension, the ban might come into play, leaving many U.S. users unable to access TikTok.
Edited by: Uwe Hessler
Author: Timothy Rooks
