The deadline for TikTok to avoid a ban in the U.S. is approaching, but users searching for clear information on the implications have not received substantial updates from TikTok or the tech companies distributing the app.
During an interview with NBC News, President-elect Donald Trump suggested he might extend the timeline, which could allow TikTok to continue operations beyond the stated deadline of Sunday when a new law aims to bar mobile app stores and internet hosting from offering TikTok to American users.
The situation has become more complex, and possibly favorable for TikTok, as the outgoing Biden administration stated that it views the law’s enforcement as Trump’s responsibility, who is set to be inaugurated soon.
According to the law, TikTok’s Chinese parent company, ByteDance, was given nine months to sell the U.S. branch of its operations to an officially approved buyer. The law also permits the current president to extend the deadline by 90 days if a sale is actively under negotiation.
Currently, a viable proposal from artificial intelligence startup Perplexity AI has been made to ByteDance, suggesting a merger between their company and TikTok’s U.S. operations. If successful, the collaboration would permit existing ByteDance shareholders to retain their stakes, but would not include the proprietary ByteDance algorithm that curates content for TikTok users. This algorithm’s absence could make TikTok’s value drop, with estimates for the app without the algorithm exceeding $50 billion. In the event the merger occurs, the algorithm would need to be redeveloped, though those discussing the proposal did so under the condition of anonymity.
In terms of other potential buyers, Kevin O’Leary from “Shark Tank” has indicated that he and billionaire Frank McCourt have assembled a group of investors willing to offer $20 billion in cash for the TikTok platform.
Trump indicated to NBC that he is likely to grant TikTok an extension after taking office, even though ByteDance has previously declined to sell. TikTok CEO Shou Zi Chew is expected to be present at Trump’s inauguration in a prominent setting, indicating political engagement with the new administration.
The uncertainty surrounding TikTok’s future continues largely due to legal rulings. Recently, the U.S. Supreme Court unanimously upheld a federal law demanding TikTok’s divestiture from ByteDance if the latter does not sell its U.S. interests. The justices denied Trump’s request to delay the ruling, which TikTok argues infringes on First Amendment rights, while the Biden administration has emphasized the risks posed by ByteDance’s control over TikTok regarding national security.
In a last-ditch effort, TikTok approached the Biden administration for a “definitive statement” guaranteeing that companies like Google and Apple would not face penalties for keeping TikTok active. However, White House Press Secretary Karine Jean-Pierre labeled TikTok’s request as a “stunt,” emphasizing that there was no immediate need for any actions before Trump’s administration took over. TikTok had not provided any comments regarding this matter by the Saturday following the news.
The fate of TikTok operations remains ambiguous as experts suggest the law could allow existing users access to the app without updates, leading to functionality issues over time. The company has indicated it may suspend its services, yet specifics were lacking, including whether this would happen at midnight.
Trump has previously credited TikTok with helping him gather support among younger voters during last year’s elections, although he had expressed opposition by attempting to ban the app and WeChat during his presidency. He suggested a decision on TikTok’s extension might be announced shortly after his inauguration, highlighting the complexity of the situation.
TikTok’s user base is substantial, with a large percentage of U.S. teenagers and many adults utilizing the platform primarily for entertainment through short videos. Many users, including content creators and small business owners, depend on the app for their livelihoods. Public sentiment has remained divided regarding a potential ban, with some polls showing dwindling support for the ban compared to earlier opinions.
Should a ban on TikTok be enforced and remain in place, the ramifications could be significant for the company’s revenue. Data suggests that even a month-long halt would result in a loss of nearly 29% of its anticipated global advertising revenue for the year 2025, alongside the loss of talent among employees. However, TikTok’s popularity internationally means it may not cease to exist entirely.
The company has reassured its American workforce of job security amid the turmoil, informing employees that they will remain secure in their roles despite the looming uncertainty around the app’s future in the U.S.
In addition to the impending sell-or-ban situation, TikTok has faced a barrage of legal challenges recently. Multiple states and the District of Columbia filed lawsuits citing concerns over the app’s potential addictive nature among children, while Virginia’s attorney general lodged a similar complaint. Internationally, TikTok has faced penalties and bans in other countries due to concerns over user safety and adherence to local laws, demonstrating a broader spectrum of scrutiny similar to that seen in the U.S.
