TikTok Grapples with Tightening Deadline: US Seeks Ownership Change

TikTok on Friday was hours from a deadline to find a non-Chinese owner or face a ban in the United States.

The widely used video-sharing application, boasting over 170 million users in America, now faces potential disruption due to an overwhelming majority vote on a U.S. legislation enacted last year. This law mandates that TikTok must either separate from its parent company, ByteDance of China, or cease operations within the United States.

On Thursday, US President Donald Trump stated that his administration was “very near” to securing a deal to sell TikTok, mentioning that several investors were part of this potential agreement without providing additional specifics.

Driven by concerns over national security and the prevailing sentiment in Washington that TikTok is essentially under the control of the Chinese government, the legislation came into force on January 19, just a day prior to President Trump's inauguration.

Before the deadline arrived, TikTok briefly ceased operations within the United States and vanished from app stores, causing disappointment among millions of users.

However, the GOP president promptly declared a postponement of 75 days, after which TikTok reinstated service for current users and was once again made available on both the Apple and Google app stores in February.

The deadline for this extension is set to end at midnight (0400 GMT) on April 5. However, Trump has consistently minimized concerns about TikTok’s potential risk, stating that he continues to have confidence in locating a purchaser for the application's operations within the United States.

The president additionally proposed that TikTok might be included in an extensive agreement with China to alleviate the significant tariffs he implemented against Beijing as part of his global wave of taxes.

When asked on Thursday whether he would be open to making deals with countries regarding tariffs, he responded, "I'm only interested if they offer us something beneficial. Take TikTok for example."

"There's an issue with TikTok; China might likely agree to a deal, but they should address the tariffs first. These tariffs provide us significant leverage for negotiations," he said additionally.

As per the reports, the probable outcome could involve current American investors in ByteDance maintaining their holdings as part of a newly established standalone international TikTok entity.

Additional U.S.-based investors, such as Oracle and Blackstone — the private equity company — would be brought in to decrease ByteDance's ownership stake.

A significant portion of TikTok's operations in the United States is hosted on Oracle servers, and the company’s chairman, Larry Ellison, has been a consistent supporter of former President Trump.

What about the algorithm?

However, doubt still exists regarding the fate of TikTok's precious algorithm.

Forrester Principal Analyst Kelsey Chickering stated, 'TikTok without its algorithm is akin to Harry Potter without his wand — it lacks its core power.'

She noted that if the TikTok experience declines, users, creators, and advertisers might invest additional time and resources into alternative media platforms.

The New York Times proposed that the new firm might obtain it through licensing from ByteDance.

This kind of setup would contradict the essence of the legislation, partly because it assumes TikTok's algorithm could be exploited by China as a tool against U.S. interests.

Amazon has apparently placed a last-ditch offer to acquire TikTok.

Another proposal is an initiative named "The People's Bid for TikTok," initiated by Frank McCourt's Project Liberty, which focuses on real estate and sports ventures.

The artificial intelligence company Perplexity has shown interest in acquiring TikTok. Additionally, a partnership between YouTube star MrBeast and another proposal from adult entertainment site OnlyFans have also been put forward for consideration.

Although Trump advocated for a ban during his initial term, he recently shifted his stance to defend TikTok, viewing it as a factor that attracted more young voters to support him in the recent election.

One of his major political donors, billionaire Jeff Yass, is a major stakeholder in parent company ByteDance.