Will TikTok's US operations be sold or banned? Who could buy it?

With TikTok’s US operations facing a looming ban, speculations about potential buyers have risen. The popular short-video app has become a central point of tension between the US and China, as national security concerns over data privacy mount.

TikTok’s parent company, ByteDance, along with the Chinese government, has resisted calls to divest the platform. Despite this resistance, several high-profile players and entities have emerged as potential buyers if a sale becomes unavoidable.

What the reasons are behind the sale talks

The US government has cited TikTok as a potential threat to national security due to its ties to China. Lawmakers fear that ByteDance could provide the Chinese government access to sensitive user data or use the app for covert influence campaigns targeting Americans.

These concerns led to bipartisan support for legislation requiring TikTok’s US operations to be sold or banned altogether.

However, ByteDance has consistently pushed back against these allegations, stating that its operations outside China are independent and secure. TikTok CEO Shou Chew has warned that separating the US version of the app from ByteDance could render the platform dysfunctional.

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Moreover, the Chinese government has indicated that it would block any sale involving TikTok’s highly valuable algorithm, which is the cornerstone of the app’s global success.

The algorithm’s exclusion from a potential deal complicates matters for any buyer, as it significantly impacts TikTok’s market value and operational appeal. ByteDance itself is valued at an estimated $225 billion, though experts suggest TikTok’s US operations alone, without the algorithm, would be worth around $20 billion.

Who could buy TikTok?

Frank McCourt

Leading the charge among potential buyers is billionaire Frank McCourt, the former owner of the Los Angeles Dodgers. Through his initiative, Project Liberty, McCourt has formally proposed acquiring TikTok’s US operations for $20 billion, excluding its algorithm.

McCourt’s vision for TikTok goes beyond maintaining the platform’s popularity. Project Liberty aims to reimagine digital infrastructure by prioritising user data privacy and reducing the amount of personal information collected.

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This approach aligns with McCourt’s broader mission to “fix the internet” by creating a more decentralised and transparent online ecosystem.

The bid is backed by private equity firms, high-net-worth individuals, and public figures like Kevin O’Leary from Shark Tank. McCourt has reportedly secured debt financing and verbal commitments from investors to support the acquisition.

Preliminary talks have also been held with US government officials to navigate regulatory challenges and avoid a complete ban.

Elon Musk

Elon Musk has also emerged as a potential buyer, with reports suggesting that his social media platform X (formerly Twitter) could take over TikTok’s US operations. Musk’s interest in expanding X’s capabilities to include video content and social media engagement makes TikTok an attractive proposition.

Discussions around Musk’s involvement remain in the early stages, and the extent of his interest is unclear. However, his proven track record of innovation and willingness to take risks could position him as a formidable contender if ByteDance decides to sell.

Bobby Kotick

Another name in the mix is Bobby Kotick, the former CEO of Activision Blizzard. Following Activision’s successful sale to Microsoft, Kotick has expressed interest in acquiring TikTok. He has reportedly held discussions with tech leaders, including OpenAI CEO Sam Altman, to secure funding for the bid.

While Kotick has kept a low profile regarding his plans, his experience in the tech and gaming industries could provide a unique perspective on managing TikTok’s US operations.

Microsoft and Walmart

Microsoft previously attempted to acquire the platform in 2020 but was unable to finalise the deal. Microsoft’s involvement could help it expand its social media presence, but it may also attract scrutiny from federal regulators concerned about market monopolies.

Walmart, under CEO Doug McMillon, also expressed interest in TikTok during the 2020 negotiations. The retail giant’s focus on e-commerce and digital advertising aligns well with TikTok’s capabilities, making it a logical candidate if ByteDance revisits the idea of a sale.

What the complications are

Any potential sale of TikTok’s US operations faces numerous challenges. ByteDance’s refusal to include the algorithm in a deal significantly reduces the platform’s value and functionality. Additionally, Beijing’s “golden share” in ByteDance gives the Chinese government leverage over any decisions regarding TikTok.

Regulatory hurdles in the US add another layer of challenges. A sale involving major tech companies like Microsoft or Elon Musk’s X could invite antitrust scrutiny. Political dynamics also play a role, as US President-elect Donald Trump was vocal about banning TikTok but may now oppose a ban given the platform’s popularity among young voters.

The US Supreme Court’s decision, expected by January 19, will likely determine TikTok’s future in the US. If ByteDance fails to address national security concerns, the app could face a complete ban, forcing millions of users to migrate to other platforms.

Alternatively, a sale could usher in a new era for TikTok under different ownership in the US.

With inputs from agencies