The popular short-form video app TikTok could be banned in the United States as early as January 19, unless its China-based parent company, ByteDance, divests the platform or shuts down U.S. operations. The ban, mandated by a federal law, has triggered uncertainty and speculation as potential buyers and legal challenges swirl.
Valuation and Algorithm: The Core Challenges
TikTok’s valuation has been a focal point of discussions. Analyst Dan Ives of Wedbush estimates the platform is worth “well north of $100 billion,” and up to $200 billion if its proprietary algorithm is included. Without the algorithm, however, the valuation could drop to $40 billion or $50 billion.
The algorithm, considered TikTok’s “secret sauce,” is central to its global success and user engagement. ByteDance and its attorneys argue that selling TikTok without the algorithm would render the U.S. version of the app disconnected from its global operations. Additionally, Chinese authorities are unlikely to approve the sale of the algorithm, making divestment increasingly complex.
U.S. officials have raised concerns over the algorithm’s potential for manipulation by Chinese authorities, who could influence content on the platform undetected.
Potential Buyers Emerge Amid Uncertainty
Several high-profile individuals and groups have expressed interest in acquiring TikTok. Billionaire Frank McCourt, along with his internet advocacy group, has submitted a proposal, promising to restructure the platform and enhance transparency through an open-source protocol. “It’s about giving people more control over their digital identities and data,” McCourt said.
Former Treasury Secretary Steven Mnuchin has also announced efforts to form an investor group to purchase TikTok, though details remain sparse. Mnuchin previously helped broker a 2020 deal involving Oracle and Walmart, which aimed to address national security concerns but ultimately fell through.
Other potential buyers include Tesla CEO Elon Musk, investor Kevin O’Leary, former Blizzard-Activision CEO Bobby Kotick, and YouTube personality Jimmy Donaldson, known as MrBeast. However, the seriousness and feasibility of these bids remain unclear.
Supreme Court and Political Intervention
As the deadline nears, TikTok’s fate may hinge on the Supreme Court, which heard oral arguments last week on the legality of the ban. A decision is expected within days.
Meanwhile, President-elect Donald Trump, set to take office on January 20, has asked the court to pause the ban to allow his administration to pursue a political resolution. Trump has pledged to “save TikTok” but has yet to outline a detailed plan.
The Justice Department under Trump’s administration will be tasked with enforcing the ban, should it take effect. Attorney General nominee Pam Bondi declined to comment during a Senate hearing on whether she would uphold the prohibition.
As the clock ticks down, TikTok’s future in the U.S. hangs in the balance, with potential buyers, legal rulings, and political strategies all playing pivotal roles.
