TikTok is less than 3 hours from going dark on USA's east coast if TikTok owner Bytedance (and Chinese Government) follows thru its "bluff" to honor the law "Protecting Americans from Foreign Adversary Controlled Applications Act" which goes into effect on Jan 19, 2025. And suddenly there is lots of politics and gamesmanship around TikTok.. Let's look at the players and their positions
US Congress:
The "TikTok Ban" law was passed by congress with bipartisan support and coincidently it goes into effect one day before new administration takes charge. Everyone knew the exact date and time of oath taking ceremony of new President...but maybe the congress did not think that there would be change of President and did not bother to put effective date post new government taking charge...that created a window of 36 hours of "law being in effect" unless...
President Biden:
Biden himself did not think that he won't be President for 2nd term. So now it comes to Biden to either do nothing (means law goes into effect) or extend the deadline by 48 hours so that further decision can be taken by Trump...But President Biden does not want his last decision to be over-ruling the law which was passed by bi-partisan support and signed by him. So they are pushing TikTok to continue operating as if law is not in effect and push....
President Trump:
Biden's decision to not provide extension means President Trump would have to make the decision of what to do about the law as one of his first few decisions in 2nd term...Trump was supportive of TikTok ban in his first term only to change the opinion given how it helped him win 2nd term with billions of views to his account on TikTok...so suddenly he wants to keep it running by providing 90 day extension to law taking effect and do what he does best...play negotiator to broker a deal so that it's owned by American entity....unless
Chinese Government:
Chinese government understands that it got a strong bargaining chip since the app is popular among 170 million Americans and livelihoods of thousands of creators depend on app running....so they want to put this in the mix of negotiations around tariffs, export controls and many other thorny issues between USA and China...they don't mind economic aspects of total shutdown may cost Bytedance $50-100 Billion of valuation...and potentially billions to its....
American Investors:
While exact amount invested is not known, American investors are sitting on billions of investment gains on their investments in TikTok and they would like to see TikTok keep running and keep growing their huge gains...they must be lobbying tech billionaires who have become friends of Trump and would be....
The Acquirers:
There are already two bids for TikTok US - one from 2 year old company Perplexity which was valued at 300 M just 12 months back and is now worth about 9 Billion. This is bold move by Perplexity to bid for TikTok which may be 8 times bigger in terms of valuation and 50-100 times bigger in terms of revenues..they want access to troves of data TikTok has amassed to help train their AI models and engines...and then there are other large players like Google, Oracle, Meta (it's also competitor with its Instagram Reels and one to benefit most with the ban), OpenAI, Musk companies (X, X.AI) who will like to have piece of this lucrative property..and don't forget Trump's company Truth Social which also will like to be in the play...with business friendly administration in Washington and forced by law, acquirer will have easier time to get approval from regulators under the premise of concerns for.....
The Americans:
I must say TikTok is addictive and quite entertaining...it provides entertainment to 170 million people and by one estimate has contributed to 71 billion to American Economy....so Americans enjoy the app and many of them get their news from TikTok videos...most of them open it multiple times and on an average spend about 54 minutes per day on....
TikTok:
TikTok has become synonymous to short videos and its algorithm does pretty good job in keeping the engagement (much better than its competitors). It is growing by leaps and bounds and has created real employment (direct and indirect). The company claims that data collected on users is kept in the USA and will not comply in case Chinese Government asks access to the data. By one estimate, US operations of the company has revenues of about $8 Billion and valuation of 50-80 billion. Its owner Bytedance has valuation of over $300 billion and would like to keep TikTok US. But due to law, it has to divest it to American investor(s) provided Chinese Government approves. It does not want to be on wrong side of Chinese Government (knowing fate of Alibaba and Didi) so will do what can be approved by Chinese Government.....
I can keep going but let's see what most likely is going to happen...
President Biden will provide short-term last minute reprieve to delay the ban...or TikTok will go dark for about 48 hours...
President trump will provide 90 day extension and start negotiating the deal involving all the players mentioned above and in the end TikTok will remain in USA and Americans will forget why the law was even passed in the first place...
Maybe someone should make a TikTok video on this topic followed by full-length movie as this saga unfolds...
/Shyam
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