The United States came at TikTok pretty aggressively, following major concerns over the safety of US user data. After years of congressional hearings and proposed action against the popular social media app, a ban was finally instituted against the company. Interestingly, that ban only resulted in a single day of service interruption in the US.
Right now, TikTok has been forced to sell itself to a US entity to keep operating in the US, and pending that, it has been given repeated grace periods, which have kept it operating in the US. There might not be a need for another grace period, however, as it seems that the whole saga may finally be approaching its finale.
TikTok May Be Sold to a Group of Investors, Including Oracle, to Keep It Operating in the US
While TikTok might still be happily operating in the United States, the only way that the major social media platform will be able to free itself from the impending ban is by divesting from ByteDance to a non-Chinese parent company. That's exactly what seems to be set to happen, and that could finally bring an end to the American government's long-standing vendetta against TikTok.
Information from The Information (pun intended) reports that the Trump administration is approaching the conclusion of a deal to sell TikTok to a group of non-Chinese investors. That indicates the group will likely not be comprised exclusively of American businesses. However, one major business in that group is Oracle, a giant in the tech space, and one that currently works with the American federal government on cloud infrastructure.
However, before you get too excited, it is important to keep in mind that the Chinese government will need to approve the deal. However, it seems unlikely that it would choose not to, considering…
ByteDance Would Maintain a Minority Share Under This Arrangement
This might be the sweetest aspect of the deal for ByteDance. TikTok is one of the most popular apps in the world, and being forced to let go of it in a market as lucrative as the US would be a significant blow to any business.
There's a concession, however. The structure of the proposed deal would leave ByteDance with a minority stake in TikTok in the US (although the exact percentage is uncertain). Besides the actual cash the sale would bring in, ByteDance would still retain some aspect of the profits from operations in the US. I believe that'll be the crucial upside for ByteDance.
The current grace period for TikTok ends in mid-September, so I think this new outlet for concluding this saga might be considered pretty strongly.
A Separate TikTok App for the United States is Reportedly in Development
Since TikTok will essentially be broken into global TikTok and TikTok US, it isn't too surprising that the actual app will have to be split into two as well, and that's already in the works.
The report from The Information points to the ongoing development of M2, the codename for the TikTok US. It is expected to launch in early September, with the current TikTok app staying functional in the US until March next year.
It's hard to see this new opening being rejected, but with time, we'll see what the Chinese government thinks of the new proposal.
