The hugely popular video-sharing app TikTok, which boasts over 170 million American users, faces a looming threat from a US law passed last year that mandates TikTok to sever its ties with its Chinese owner, ByteDance, or face being banned in the United States.
On Thursday, April 3, US President Donald Trump had said that his administration was "very close" to a deal for finding a buyer for TikTok, adding that the deal involved "multiple" investors, though he provided no further details.
Motivated by national security concerns and the widespread belief in Washington that TikTok is ultimately controlled by the Chinese government, the law came into effect on January 19, just one day before Trump's inauguration.
In the hours leading up to the deadline, TikTok temporarily shut down in the US and disappeared from app stores, causing frustration among millions of users. However, Trump swiftly announced a 75-day delay, and TikTok was reinstated for existing users and returned to the Apple and Google app stores in February.
That delay is set to expire at midnight (0400 GMT) on April 5, but Trump has downplayed the risks, expressing confidence in securing a buyer for TikTok's US operations. The president also suggested that TikTok could become part of a broader deal with China aimed at addressing the tariffs he imposed on Beijing as part of a global trade blitz.
Asked whether he was open to making deals on tariffs, Trump said: "As long as they are giving us something that is good. For instance with TikTok." He further noted, "We have a situation with TikTok where China will probably say we'll approve a deal, but will you do something on the tariffs. The tariffs give us great power to negotiate."
Reports suggest the most likely solution would involve existing US investors in ByteDance rolling over their stakes into a newly independent global TikTok company. Additional US investors, including Oracle and private equity firm Blackstone, would be brought on to reduce ByteDance's share. TikTok's US operations are already housed on Oracle servers, and Larry Ellison, Oracle’s chairman, is a longtime Trump ally.
Despite this, there remains uncertainty over the future of TikTok’s algorithm, which is considered vital to its success. "TikTok without its algorithm is like Harry Potter without his wand — it's simply not as powerful," said Forrester Principal Analyst Kelsey Chickering. "If the TikTok experience degrades, users, creators, and advertisers will spend more time and money on other media channels," she added.
The New York Times suggested that the new company might license the algorithm from ByteDance. However, such an arrangement could undermine the law's premise, which is partly based on the concern that TikTok’s algorithm could be weaponized by the Chinese government against US interests.
In the final days before the deadline, Amazon reportedly made a last-minute bid to acquire TikTok, while other proposals have emerged, including "The People’s Bid for TikTok," led by real estate and sports tycoon Frank McCourt’s Project Liberty initiative. Artificial intelligence startup Perplexity and a joint venture involving YouTube celebrity MrBeast, along with a bid from adult content platform OnlyFans, have also expressed interest in acquiring the app.
Trump, who had supported a ban during his first term, has recently taken a more favorable stance on TikTok, viewing it as a factor in securing support from younger voters in the November election. Additionally, one of Trump’s major political donors, billionaire Jeff Yass, is a significant stakeholder in ByteDance, TikTok’s parent company.
