The Race to Buy TikTok Is On—but There Might Not Be a Winner

This has done little to deter a growing list of other business tycoons who have also expressed interest in acquiring the app, which has been under government scrutiny in the United States for four years over alleged national security concerns stemming from its Chinese ownership. One of them is former Treasury Secretary Steven Mnuchin, who said earlier this week He was also gathering a group of investors to make a bid for TikTok. He first hinted at the plan in March, before the divestment bill became law.

Mnuchin told Bloomberg He understands that the Chinese government is unlikely to allow ByteDance to sell TikTok’s algorithm, but plans to “rebuild the technology.” That would be quite an effort, especially considering that TikTok competitors like YouTube and Meta have been trying to copy its product for years with mixed success.

There is at least one business connection between Mnuchin and TikTok: Both are backed by Japan’s SoftBank, which has stakes in ByteDance and Liberty Strategic Capital, the private equity firm Mnuchin created after leaving office. A representative for Liberty Strategic Capital did not immediately respond to a request for comment on Mnuchin’s TikTok acquisition strategy.

Former Activision CEO Bobby Kotick has also reportedly considered purchasing TikTok. The even the idea floated to Zhang Yiming, former ByteDance CEO, who retains about a 20 percent stake in the company, the Wall Street Journal reported in March. Almost at the same time, the Canadian businessman and shark tank Judge Kevin O’Leary told Fox News that the application “will not be banned, because I am going to buy it.”

O’Leary did not immediately respond to a request for comment on whether he was seriously interested in TikTok. Kotick could not be reached for comment.

All of TikTok’s potential suitors would face an uphill battle to close a deal. The first challenge will be raising enough money. Only a small number of the world’s largest companies likely have enough cash on hand to purchase the app outright, and so far they have not publicly expressed interest in the platform. It’s a big change from four years ago, when then-President Donald Trump first tried to force ByteDance to sell TikTok. At the time, Microsoft, Oracle and Walmart were among the most promising buyers of the app.

But the even bigger problem facing investors is the fact that TikTok doesn’t seem to believe a sale is possible, much less desirable. In a lawsuit it filed against the US government last week, TikTok argued that the divestment bill violated the First Amendment and claimed that separating its US operations from ByteDance was “not commercially, technologically or legally feasible.”

TikTok noted that the Chinese government has “made it clear” that it would not allow the company to sell its recommendation algorithm to a foreign buyer, citing regulations Beijing introduced after Trump first targeted TikTok in 2020. The measures set limits to the export of certain technologies such as “personal interactive data algorithms.”

Even if a sale were politically possible, TikTok argued that the move would “disconnect Americans from the rest of the global community” on the platform, possibly in the same way that the Chinese version of the app is restricted only to people in China. TikTok added that it would take years for a team of new engineers to examine its source code and “gain sufficient familiarity” with it to run the app effectively.

A group of TikTok creators presented a separate lawsuit against the federal government earlier this week arguing that the divestment bill violated their free speech rights. (TikTok is paying his legal fees.) Separating TikTok from ByteDance, they said, “is not feasible, as the company has stated and as publicly available registration confirms.”

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