Trump says TikTok deal is in the works. Here's where things stand with the company

A visitor passes the TikTok exhibition stands at the Gamescom computer gaming fair in Cologne, Germany, Thursday, Aug. 25, 2022. (AP Photo/Martin Meissner)

In less than a month, TikTok could have one or a few new owners, be banned again, or simply receive another reprieve to continue operating in the United States.

Questions about the fate of the popular video sharing app have continued to linger since a law requiring its China-based parent company to divest or face a ban took effect on Jan. 19. After taking office, U.S. President Donald Trump gave TikTok a 75-day reprieve by signing an executive order that delayed enforcement of the statute until April 5.

As he returned to Washington from his Florida home on Sunday, Trump told reporters that a deal could come soon. He did not offer any details on the interested buyers, but said the administration was in talks with “four different groups” about TikTok.

“A lot of people want it and it’s up to me,” Trump said aboard Air Force One.

A TikTok spokesperson declined to comment.

What will happen on April 5?

If TikTok is not sold to an approved buyer by April 5, the original law that bans it nationwide would once again go into effect. However, the deadline for the executive order doesn’t appear to be set in stone and the president has reiterated it could be extended further if needed.

Trump’s order came a few days after the Supreme Court unanimously upheld a federal law that required TikTok’s parent company, ByteDance, to divest or be banned in January. The day after the ruling, TikTok went dark for U.S. users and came back online after Trump vowed to stall the ban.

During his first term, Trump tried to ban TikTok on national security grounds, which was halted by the courts before his administration negotiated a sale of the platform that eventually failed to materialize. He changed his position on the popular app during last year’s presidential election and has credited the platform with helping him win more young voters.

The decision to keep TikTok alive through an executive order has received some scrutiny, but it has not faced a legal challenge in court.

Who wants to buy TikTok?

Although it’s unclear if ByteDance plans to sell TikTok, several potential bidders have come forward in the past few months.

Aides for U.S. Vice President JD Vance, who was tapped to oversee a potential deal, have reached out to some parties, such as the artificial intelligence startup Perplexity AI, to get additional details about their bids, according to a person familiar with the matter. In January, Perplexity AI presented ByteDance with a merger proposal that would combine Perplexity’s business with TikTok’s U.S. operation.

Other potential bidders include a consortium organized by billionaire businessman Frank McCourt, which recently recruited Reddit co-founder Alexis Ohanian as a strategic advisor. Investors in the consortium say they’ve offered ByteDance US$20 billion in cash for TikTok’s U.S. platform. And if successful, they plan to redesign the popular app with blockchain technology they say will provide users with more control over their online data.

Jesse Tinsley, the founder of the payroll firm Employer.com, says he too has organized a consortium, which includes the CEO of the video game platform Roblox, and is offering ByteDance more than US$30 billion for TikTok.

Trump said in January that Microsoft was also eyeing the popular app. Other interested parties include Trump’s former Treasury secretary Steve Mnuchin and Rumble, the video site popular with some conservatives and far-right groups. In a post on X last March, Rumble said it was ready to join a consortium of parties interested in purchasing TikTok and serving as a tech partner for the company.

What could happen next?

Trump has said he is looking to have the U.S. government broker a deal for 50 per cent control of TikTok. However, the administration hasn’t provided details on what exactly that would entail, or what role the U.S. government could play in the future of the short-form video app.

Some potential bidders have floated proposals that would allow the U.S. to invest or own a stake in the platform. Last month, Trump himself also said the U.S. could own part of TikTok through a new government-owned investment fund.

Chinese officials, who would have to approve the deal, appear to have softened their stance on the issue compared to last year when Beijing called the push for divestment a “robbers” act.

Chinese Foreign Ministry spokeswoman Mao Ning said in January that business operations and acquisitions “should be independently decided by companies in accordance with market principles.”

“If it involves Chinese companies, China’s laws and regulations should be observed,” Mao said.

If ByteDance sits down to negotiate, the company would likely need to iron out major details with the U.S. over the proprietary algorithm that populates TikTok feeds as well as the flow of content between the U.S. and the rest of the world.

Haleluya Hadero, Michelle Price and Didi Tang, The Associated Press