The race is on to find a new owner for TikTok in the US.
A divest-or-ban law requires its China-based owner, ByteDance, to separate from its US app. The Trump administration has had discussions with ByteDance and potential bidders to find a path forward for TikTok.
Trump has twice postponed enforcement of the law, and he issued an executive order in June giving TikTok a September 17 deadline to strike a deal. He may very well try to extend the deadline again if a resolution isn’t reached. The president told reporters in late August that “until the complexity of things work out, we just extend a little bit longer.”
The White House launched an official TikTok account on August 19, and later that week, the president told reporters he is a fan of TikTok.
It’s not clear yet what a deal to buy TikTok would look like. Since January, when TikTok briefly shut down in the country to comply with the law, a hodgepodge of bidders has emerged for the app. Among the suitors are AI company Perplexity, billionaire Frank McCourt, and adtech firm AppLovin. Another possibility is that a coalition of US investors could band together to buy a big enough stake in the company to meet the law’s divestment requirements. Trump told reporters in late August that he had “very substantial American buyers who want to buy it,” but he hadn’t spoken to China’s president Xi Jinping yet about it.
Trump earlier proposed a joint venture that would give a US entity 50% ownership of the company. The move would not be unprecedented, as the government recently took a nearly 10% stake in Intel. Legal analysts told Business Insider that owning a piece of a big social-media platform could raise novel constitutional questions about free speech.
Read more about legal questions that could arise if the government gets a stake in TikTok.
If ByteDance does sell TikTok’s US business, it may migrate its US users to a separate app in the country, The Information first reported. Important questions remain, such as whether a TikTok US app would connect with users from the rest of the world, or if the app would use ByteDance’s algorithms to recommend content to users.
TikTok briefly went dark in January
The divest-or-ban law originally gave TikTok until January 19 to find a new owner or effectively shut down. On that day, US service providers had to stop working with TikTok and other ByteDance apps, including Lemon8 and CapCut, meaning the app went dark.
The blackout didn’t last long, as the app came back online after Trump issued an executive order instructing his attorney general not to enforce the law for 75 days.
While TikTok began restoring service in the US within 24 hours, the app didn’t return to Apple and Google’s app stores until February 13.
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Read more about the app’s whirlwind TikTok shutdown and revival.
Trump became TikTok’s last hope after a string of legal defeats
TikTok seems to have placed its future in the hands of Trump. Users who opened the app when service was restored in the US saw a message from the company that credited Trump for the revival. The next day, TikTok’s CEO attended the president’s inauguration.
But the company earlier sought a different path to survival, hoping the courts might strike down the ban, as happened with earlier state efforts to shut down the app.
TikTok filed a legal challenge to the federal law in the DC Circuit in May. It lost its case in December. It then appealed to the Supreme Court, which ruled on January 17 that the law was constitutional and did not violate the First Amendment rights of TikTok or its creators.
There’s no doubt that TikTok “offers a distinctive and expansive outlet for expression,” the court wrote in its decision, “but Congress has determined that divestiture is necessary to address its well-supported national security concerns regarding TikTok’s data collection practices and relationship with a foreign adversary.”
The Supreme Court’s decision was largely expected. Legal analysts told BI ahead of the ruling that the court would likely defer to Congress’ authority on national security concerns.
On the campaign trail, Trump said he would try to save TikTok once in office, a flip-flop from his position during his first presidential term. He met with TikTok’s CEO Shou Chew on December 16, and said during a press conference that day that he had “a warm spot in my heart for TikTok.”
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A TikTok sale seems to be the preferred path forward among some members of Congress, too. Rep. John Moolenaar, the chair of the House’s Committee on China, told BI in a statement that the Trump administration would “have a unique opportunity to broker an American takeover of the platform, allowing TikTok users to continue to enjoy a safer, better version of the app free from foreign adversary control.”
In Congress, the TikTok law, known as the Protecting Americans from Foreign Adversary Controlled Applications Act, drew bipartisan support. But support for a ban has faded among the American public. In a Pew Research Center survey of US adults from July and August, about one in three respondents (32%) supported a government TikTok ban, down from 50% in March 2023.
Will China let TikTok be sold?
A TikTok sale may ultimately become a bargaining chip in larger US-China trade negotiations.
Any deal around TikTok would require the blessings of owner ByteDance and both the US and Chinese governments. In a January briefing, a spokesperson for China’s Foreign Ministry seemed open to letting a deal be “independently decided,” though he added that “China’s law and regulations should be observed.”
A ByteDance spokesperson said in April that it’s been in discussion with the US government regarding a potential solution for TikTok. There are key matters to be resolved and any agreement will be subject to approval under Chinese law, they said.
Why politicians want to ban TikTok
Government officials have been worried about TikTok’s growing influence in the US for years.
Its owner, ByteDance, is based in China, a country the US has deemed a foreign adversary. This has sparked fears among some officials that the company could be compelled to hand over sensitive US user data from TikTok to the Chinese Communist Party. Some members of Congress have raised concerns that TikTok could be used as a CCP propaganda tool.
TikTok has said that it does not share information with the Chinese government and that its content-moderation efforts are run by a US-based team that “operates independently from China.”
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How creators, employees, and other TikTok partners are dealing with an uncertain future
TikTok employees, creators, advertisers, and sellers who use its shopping platform have been on a wild roller coaster ride as they’ve watched TikTok’s political and legal battles.
TikTok Shop merchants began preparing for “doomsday” weeks before the app briefly went dark. Some have paused US warehouse shipments or taken other measures to prepare for a potential app closure. Others are hedging against a ban by selling in other TikTok Shop markets like Mexico.
Advertisers similarly planned to shift spending to other alternative platforms to TikTok, like Instagram reels and YouTube shorts, while influencer marketers put contingency plans into action, assuring brands that creators would upload sponsored posts onto other short-video apps.
Ahead of the app’s brief January shutdown, TikTok wrote in an internal memo to US staffers that their “employment, pay, and benefits are secure, and our offices will remain open, even if this situation hasn’t been resolved before the January 19 deadline.”
For TikTok creators and their teams, the uncertainty has elicited a mix of anger and exhaustion.
“Losing the majority of my audience is a difficult reality to face, and while I’m doing everything I can to prepare, it’s hard not to feel like I’m starting over,” TikTok creator Sofia Bella said.
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Read more about how TikTokers prepared for a shutdown
As TikTok creators await answers on the app’s future, the app’s competitors aren’t sitting idle. In January, Meta began offering creators thousands of dollars to post exclusive short-form videos on Instagram reels. In May, Instagram offered to pay creators as much as $20,000 to bring over users from TikTok and other apps via a referral program.
