Trump has indicated interest in a partnership that would sustain TikTok’s operations in the long run. The app is currently back live.
After falling offline on Saturday, TikTok is back online on Sunday. Although there will likely be some uncertainty for the app going forward, it is unlikely to disappear completely.
Following the U.S. Supreme Court’s decision on Friday, which upheld a bipartisan statute that prohibited TikTok nationally as long as it remained under the ownership of its Chinese parent firm, the app was set to shut down.
However, TikTok is now operational again after shutting down on Saturday, and it’s becoming more and more probable that the new Trump government will figure out a way to keep TikTok alive. Over the weekend, the president-elect, who will take office on Monday, said he would sign an executive order to prolong the period until the ban becomes effective.
In an interview with Truth Social on Sunday, Trump stated that his initial preference is for “a joint venture between the current owners and/or new owners whereby the U.S. gets a 50% ownership in a joint venture set up between the U.S. and whichever purchaser we so choose.”
On Monday, he added, his executive order would “confirm that there will be no liability for any company that helped keep TikTok from going dark before my order.”
TikTok expressed gratitude to Trump on social media site X “for providing the necessary clarity and assurance to our service providers that they will face no penalties” for the app’s continued support.
According to a Washington Post report that cited unnamed individuals, Trump was thinking about methods to salvage TikTok even before the app went silent. He discussed unusual deal-making and legal strategies like an executive order that would overturn the bipartisan bill. According to the BBC, legal experts have pointed out that a legislation passed by Congress with broad bipartisan support cannot be completely overturned by a president’s decree.
A 90-day extension that would postpone a U.S. ban is permissible under the Protecting Americans from Foreign Adversary Controlled Applications Act, but it comes with requirements that must be fulfilled. The Chinese owner of the app must make “significant progress” in selling TikTok’s U.S. business, and legally binding agreements must be in place to allow the deal to be executed during the extension.
However, other experts anticipate that Trump will provide a certification that those requirements have been fulfilled, even if they haven’t, and then grant the extension and participate in the negotiations for a ByteDance divestment, much like he did in his first term.
In a social media tweet on Friday morning ahead of the court’s decision, Trump claimed that TikTok was one of the topics he had recently covered in a phone conversation with Chinese President Xi Jinping. Trump officials are “going to find a way to preserve” the app while shielding American data from the Chinese government, according to Michael Waltz, the assistant for national security in the incoming administration, who spoke to Fox News on Thursday, saying “that’s the deal that will be in front of us.”
Shou Chew, the CEO of TikTok, seemed positive about Trump taking over on Friday, despite reports earlier this week that the well-known site was thinking of shutting down completely on Sunday.
In a video following the Supreme Court’s ruling, the CEO said, “I want to thank President Trump for his commitment to work with us to find a solution that keeps TikTok available in the United States, on behalf of everyone at TikTok and all our users across the country.” “We are grateful and pleased to have the support of a president who truly understands our platform – one who has used TikTok to express his own thoughts and perspectives, connecting with the world and generating more than 60 billion views of his content in the process.”
According to several published sources, the CEO of TikTok is scheduled to attend Monday’s inauguration as one of the president-elect’s guests, which is another recent indication of Trump’s support for the platform.
The Biden administration stated in a statement on Friday that TikTok “should remain available to Americans, but simply under American ownership or other ownership that addresses the national-security concerns identified by Congress in developing this law.” In April, Biden signed the TikTok-targeting bill into law after it was approved by the Senate and the U.S. House of Representatives with almost 80% of the vote in each chamber.
According to several published stories, Beijing officials have discussed selling to Elon Musk, a rich businessman and Trump supporter. Additionally, a group led by businessmen Frank McCourt and Kevin O’Leary has claimed to have approached ByteDance about purchasing TikTok’s assets in the United States. Noting that some of those businesses have previously expressed interest in the social networking platform, Wall Street analysts have identified Amazon.com Inc. (AMZN), Microsoft Corp. (MSFT), Walmart Inc. (WMT), and Oracle Corp. (ORCL) as possible purchasers. An investor group headed by Steven Mnuchin, the former Treasury secretary under Trump’s first term, also expressed interest in March.
According to the Associated Press, an artificial intelligence startup called Perplexity AI indicated interest in an acquisition over the weekend.
During his first administration, Trump attempted to outlaw TikTok, but last year he changed his mind. In order to “negotiate a resolution” to save the social media company and solve national security concerns, Trump petitioned the Supreme Court last month to halt the law that targets TikTok.
The Supreme Court’s decision
The Supreme Court stated in its Friday morning ruling that there is “no doubt that, for more than 170 million Americans, TikTok offers a distinctive and expansive outlet for expression, means of engagement, and source of community.”
The report stated, “But Congress has determined that divestiture is necessary to address its well-supported national-security concerns regarding TikTok’s data-collection practices and relationship with a foreign adversary.” “The challenged provisions do not violate petitioners’ First Amendment rights,” the court declared, upholding a lower court’s decision.
How Alphabet and Meta may profit
According to analysts, TikTok’s publicly traded rivals stand to gain significantly if the app permanently disappears from the US market.
According to Benchmark analysts, TikTok’s U.S. ad revenue was forecast at $10.1 billion last year and might reach $12.8 billion this year. They believe that 80% or 90% of the income, which could be up for grabs, would go to Alphabet Inc. (GOOG) (GOOGL) and Meta Platforms Inc. (META), which generated roughly $65 billion and $101 billion in U.S. ad revenue last year, respectively. Facebook and Instagram are owned by Meta, but YouTube and Google are owned by Alphabet.
According to the Benchmark analysts, Snapchat parent company Snap Inc. (SNAP) and Pinterest Inc. (PINS) may receive the remaining 10% or 20% of TikTok’s ad revenue.
Morgan Stanley analysts believe that Meta and Alphabet stand to gain the most if TikTok is shut down or acquired by a business that doesn’t make sure the app succeeds. They claimed to see benefits for Reddit Inc. (RDDT), Pinterest, and Snap as well.
While shares of Meta, Reddit, and Pinterest slightly increased on Friday, Snap’s price fell 3%. The tech-heavy Nasdaq Composite COMP and Alphabet’s stock both increased by more than 1%.
Oracle, a client of TikTok, issued a warning in June that the company may suffer if TikTok were to be banned in the United States. According to Morgan Stanley analysts, TikTok generates around $370 million in revenue annually for Oracle’s cloud computing division. On Friday, Oracle’s stock ended the day about 1% higher.
The law, according to TikTok and its backers, amounts to the government stifling free expression. The law’s supporters claim that because the app’s parent business is required to comply with Chinese government directives, it poses a threat to national security.
The justices of the Supreme Court seemed to understand the national security issues during last week’s oral arguments about the TikTok law.
“Are we supposed to ignore the fact that the ultimate parent is, in fact, subject to doing intelligence work for the Chinese government?” Noel Francisco, the attorney for TikTok and the former U.S. solicitor general during the first Trump administration, was told this by Chief Justice John Roberts.
