A TikTok sale under Trump? Experts say it could actually happen this time

Caption

TikTok's future in the U.S. remains uncertain, with a divest-or-ban law about to take effect on Jan. 19. If TikTok's legal team is not able to defeat the law in court, one possibility that is being increasingly discussed among TikTok experts involves the sale of the service to a group of American investors. / Getty Images North America

During his first term, President-elect Donald Trump sought to put TikTok out of business. Four years later, he is vowing to save the viral video app as it quickly approaches a January deadline that could have the service banned in the U.S.

While TikTok finds itself in a thorny spot in Washington, one possible way out is being increasingly discussed by longtime TikTok watchers: Trump extending the app's January divest-or-be-banned date and then leaning into his dealmaker image by attempting to broker a agreement for TikTok to be sold off.

But according to analysts who study TikTok's battle with Washington, both the Chinese government and TikTok's Beijing-based owner ByteDance could be warming up to the idea of TikTok becoming majority-owned by an American company, or a group of U.S. investors.

Experts told NPR that if China can extract some tariff concessions alongside a possible TikTok deal, officials there could become more receptive to a sale, something Beijing has long resisted.

From TikTok crackdown to TikTok savior

In his first term, Trump signed executive orders aimed at shutting down TikTok on national security grounds over its ties to China, but those efforts were blocked by federal courts.

Now, Trump has changed his tune.

Trump started telegraphing his about-face on TikTok back in March. In one post on his social media platform Truth Social, Trump wrote that outlawing the Chinese-owned video-streaming app would be a gift to Meta's Facebook. He called Facebook "a true Enemy of the People!" for "cheating" in the last election — a claim that has not been proven.

Then in June, Trump's campaign joined TikTok in an apparent effort to connect with younger voters.

Multiplereports have tied Trump's change of heart on TikTok to an effort to court billionaire Republican donor Jeff Yass, whose investment company, Susquehanna International Group, has a large stake in ByteDance, TikTok's Beijing-based owner. While Yass never publicly endorsed Trump, he funneled millions into groups including the super PAC Club for Growth that backed conservative policies in the 2024 election. A request for comment attempting to reach Yass through Susquehanna International Group was not returned.

The Trump transition team did not return a request for comment about Yass, nor about any potential TikTok sale. In a March interview with CNBC, Trump said Yass had not brought up TikTok with him.

A spokesman for TikTok referred NPR to a legal filing in its pending case against the Biden administration arguing that fully divesting from ByteDance is "not commercial, not technically, not legally" possible.

Current and former members of the intelligence community in Washington view the Chinese Communist Party's potential influence over TikTok as a national security risk.

"As long as TikTok is controlled by an entity under the jurisdiction of the CCP, it's not great for Americans," said Megan Stifel, the former director of international cyber policy on the National Security Council under President Obama. "TikTok should be viewed in terms of how it can be leveraged for untoward intentions and part of a broader canvass of data the CCP is constantly collecting."

All eyes on outcome of TikTok legal battle over its fate

ByteDance's ownership of TikTok has led to a bipartisan movement against it, with lawmakers and national security officials fearful that China could one day use the app to spread disinformation or to conduct mass surveillance.

A federal law Congress passed in April stipulates that TikTok be banned by Jan. 19 unless ByteDance fully divests from it. The next day, Trump is set to be sworn into office.

The ban, however, is not expected to take effect instantly. The law forces app stores controlled by Apple and Google to remove TikTok. It also makes it illegal for web-hosting services to support TikTok. The enactment and enforcement of these provisions could be delayed by the pending litigation or Trump taking action.

Looming over all the talks about a possible TikTok sale is a court battle over the legality of the law.

A panel of three judges from the U.S. Court of Appeals for the D.C. Circuit heard arguments in September from the Justice Department and lawyers for TikTok over whether the law is constitutional.

The Justice Department argued that the divest-or-ban law is justified because Americans' data and views cannot be potentially vulnerable to decisions made by China, a foreign adversary of the U.S. But attorneys for TikTok say banning the app violates the free speech of millions of Americans, some of whom turn to the service to express their political views.

Lawyers from both sides have asked the judges to make a decision by Dec.6.

There could be a drawn-out appeals process. Either party can ask for an "en banc" review of the case, which means the case would be re-argued before all 11 judges on the D.C. appeals court. And from there, the matter can be appealed to the Supreme Court. But if the court overturns the law, the Trump administration may decide not to appeal, in line with the president-elect's new view that TikTok should not be banned.

TikTok sale as possible trade bargaining chip?

If the law is ultimately upheld, Trump may try to strike a deal that would spin the app off, and that agreement might become part of much larger trade discussions with China, according to Daniel Lyons, law professor at Boston College who specializes in internet law.

"In his mind, it might be 'What are the benefits of a win on TikTok versus the cost of trade concessions?" Lyons said.

James Lewis, a former diplomat now at the Center for Strategic and International Studies, agreed that Chinese officials could entertain a sale if it becomes part of the larger trade debate.

"If ByteDance can stay a passive owner, if the Chinese have some sort of degree of control over the algorithm, and TikTok can operate in the places it's allowed to operate now, it might be enough for them to swallow," he said.

That's a lot of "ifs."

It's unclear if the incoming Trump administration would allow for a sale in which ByteDance stayed a minority owner. And past proposals, including a pitch earlier this year from former Treasury Secretary Steve Mnuchin to organize a group of investors to purchase TikTok without the recommendation algorithm that determines what people see on the app, have drawn deep skepticism from technologists, who point out that it's one of the app's most valuable assets.

Still, China experts say Beijing may view a TikTok deal as leverage in trying to tamp down some of Trump's promised steep tariffs against the country. (On the campaign trail, Trump said he'd levy 60% percent tariffs on Chinese imports. In social media posts on Monday, he said it would be 10%.)

"TikTok may be a bargaining chip both for the Chinese and the Trump administration when it comes to discussions around tariffs," said Emile Dirks, research associate at the University of Toronto's Citizen Lab who studies Chinese politics. "The question is what kind of relationship does the U.S. want to have with China? What kind of Chinese state influence, or Chinese corporate influence, is the country willing to accept?"

While possible bidders, and TikTok's price tag, remain unknown, a surprise partnership between software giant Oracle and Walmart teamed up back in 2020 in a failed attempt to take over TikTok. Despite support from Trump, the deal fell through, as TikTok piled up victories in court and China opposed any sale. Experts say if bidders are sought, another joint corporate proposal is likely, given how expensive TikTok could be to buy. ByteDance has valued itself at $300 billion, making it the most-valuable private startup in the world. That's roughly double the worth of ChatGPT maker OpenAI.

"I think there are people who are hoping for Trump to force a fire sale for TikTok and get it at a lower price," said Lewis, adding that "there will be a lot of China hawks in the administration who will be reluctant to give up much ground on TikTok."

Best predictor of what will happen? Ask the Magic 8 Ball

With 170 million users in the U.S., TikTok is a cultural and economic force, and is one of the most influential social media apps among young Americans.

If a sale doesn't pan out, other options TikTok watchers are speculating about include Congress repealing the law — which currently appears unlikely, according to those close to the talks.

Trump could also instruct his attorney general not to enforce the law, giving the company some breathing room.

And finally, Trump could bless a $2 billion effort to wall off U.S. data from Beijing, known as Project Texas, in which Austin-based software and cloud-computing company Oracle would monitor TikTok's data flows and audit the app's algorithm. The plan was rejected by the Biden administration for falling short of full ByteDance divestiture.

"The best predictor of what the new administration's policies will be on TikTok," said Lewis with the Center for Strategic and International Studies, "remains the Magic 8 Ball."