Topline
Title: Potential Buying Partners for TikTok as Ban Looms: Elon Musk, Kevin O'Leary, and More
The AI search engine startup Perplexity AI has allegedly put forth a proposal to amalgamate with TikTok, joining the ranks of other companies and tycoons rumored to be, or who have indicated an interest in, purchasing ByteDance's popular social media application to circumvent a potential U.S. ban. (NOTE: TikTok has declared they are "restoring service" — check out more details here.)
Crucial Points
Perplexity AI has reportedly presented an offer to merge with ByteDance and New Capital Partners, with the proposal enabling most of ByteDance's investors to retain their stakes. A source close to the situation informed CNBC about this development.
There have been whispers that the Chinese government might be contemplating selling TikTok's U.S. operations to Tesla CEO Elon Musk as Beijing discuses navigating their relationship with President-elect Donald Trump, whose connections with Musk have strengthened lately. This information stems from a Bloomberg report, which ByteDance countered by stating, "We can't be expected to comment on pure fiction."
Well-known YouTuber MrBeast (Jimmy Donaldson) declared on Reddit that he'd purchase TikTok to prevent a ban, subsequently claiming to have received numerous messages from billionaires interested in collaborating on this project.
Project Liberty, an internet advocacy group spearheaded by billionaire Frank McCourt, put forth a proposal (backed by "Shark Tank" investor Kevin O'Leary, Guggenheim Securities and others) on January 9 to acquire TikTok's U.S.-based assets. The group asserted that they would restructure the company to collect less user data.
O'Leary disclosed to Fox that he offered $20 billion for TikTok, emphasizing that the Supreme Court backed a law banning the app in the U.S. so it could be sold to an "American syndicate."
A former TikTok employee suggested to our news outlet that Amazon might potentially be a prospective buyer, as Amazon – the platform's third-largest advertiser – has bolstered its relationship with TikTok following its announcement of a partnership that enables users to explore and shop Amazon products directly on the platform.
The video-sharing platform Rumble proposed acquiring TikTok in March 2024, specifying that the company was "ready to join a consortium with other parties" for purchasing the app. Neither Rumble nor CEO Chris Pavlovski revealed any details about this offer.
Bobby Kotick, Activision Blizzard's former CEO, has reportedly shown an interest in purchasing TikTok and has floated the idea with OpenAI CEO Sam Altman and others for aid in funding the transaction. Kotick has not publicly commented on the offer.
Former Treasury Secretary Steve Mnuchin indicated his plan to establish a group to acquire TikTok in March 2024, subsequently informing Bloomberg in May that he had reached out to various tech companies regarding purchasing the app and replicating its algorithm – a piece ByteDance has emphasized would not be included in a sale.
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News Hook
A nationwide ban on TikTok took effect on Sunday, with the platform shutting down for U.S. users just moments before.
Which Firms Have Attempted to Buy Tiktok?
Microsoft reportedly proposed buying TikTok from ByteDance in August 2020, with the deal nearly sealing before breaking apart. Oracle and Walmart announced in September 2020 that they had reached a deal to buy TikTok, but that agreement fell through when the Biden administration allegedly stopped it from progressing due to the app's potential security risks.
How Much is Tiktok Worth?
Dan Ives, an analyst for Wedbush Securities, revealed that their company had estimated TikTok's value at around $100 billion, including the algorithm. Ives has also suggested that ByteDance could expect $40 billion to $50 billion for the U.S. operations of the platform.
Will Trump Halt the Tiktok Ban?
Trump declared on Sunday that he'd delay the TikTok ban when he resumes office on Monday, indicating his intention to "make a deal to protect our national security." He proposed that TikTok shift to a joint venture with at least a 50% U.S. stake, allowing the platform to operate in the U.S. market temporarily if ByteDance is making progress toward a sale. Read more about Trump's alternative options here.
Key Background
President Joe Biden signed a law in April 2024 that enacted a nationwide ban on TikTok if ByteDance did not sell the app. Lawmakers had voiced concerns about TikTok's ties to China for years prior to this. Our news outlet had previously reported on TikTok's alleged spying on journalists, promotion of Chinese propaganda on the app, mishandling of user data such as financial information and Social Security numbers, and tracking of "sensitive words." TikTok and ByteDance have repeatedly denied any wrongdoing or links to the Chinese government, insisting in a legal filing in May that the proposed ban was "simply not possible: not commercially, not technologically, not legally."
Valuation Data
Musk is the wealthiest individual on Earth with an estimated net worth of $428.8 billion. McCourt, the former owner of the Los Angeles Dodgers, boasts a net worth valued at $1.4 billion.
Further Reading
Kevin O'Leary, a renowned investor from "Shark Tank", has expressed interest in TikTok's U.S.-based assets, supporting a proposal made by Project Liberty to acquire the company.Elon Musk, the CEO of Tesla, has been rumored to be contemplating the purchase of TikTok's U.S. operations, although ByteDance has disputed this claim as "pure fiction".MrBeast, a popular YouTuber, claimed on Reddit that he was considering buying TikTok to prevent a potential ban, and received messages from other billionaires interested in collaborating on the project.
