US TikTok sale brings uncertainty for creators amid free speech chill
TikTok may soon have a new US owner after a “framework of a deal” between US and Chinese leadership was announced by Donald Trump’s administration this week.
Under the terms of the reported deal, TikTok’s US business would be controlled by a consortium of investors including Oracle (owned by Larry Ellison) and tech investment groups Andreessen Horowitz and Silver Lake. US investors would hold an 80% stake, while Chinese investors would maintain a 19.9% stake.
The new company would have a US-dominated board, including one member designated by the its government.
Details of the arrangement were first reported by The Wall Street Journal, which also noted that the deal could mean a new US-specific app is created that users would need to transfer to.
CNBC subsequently reported that the agreement is expected to close in 30-45 days.
It is not yet clear who would manage TikTok’s algorithm in the US, with WSJ reporting that the US spin-off would license and adapt a version of it from ByteDance.
At a press conference in Madrid on Wednesday, Wang Jingtao, deputy head of China’s cyber security regulator, said the framework of the deal included “licensing the algorithm and other intellectual property rights” and that ByteDance would “entrust the operation of TikTok’s US user data and content security”.
Trump said the framework is expected to be “confirm[ed]” with Chinese president Xi Jinping on Friday.
In the meantime, Trump once again delayed the enforcement of the sale-or-ban law that was passed by Congress last year to mid-December. Legal experts have repeatedly argued that the Trump administration does not have the legal ability to delay implementation of the law.
Analysis: More fragmentation?
With so much uncertainty around the deal, it is unclear whether global advertisers will have to separate their TikTok media investments.
Tiah Slattery, head of influencer at marketing services company Dept, told The Media Leader that, should a separate app be created, advertisers may need to “budget separately for US TikTok and rest-of-world TikTok”, using different datasets, ad products and targeting rules.
“That complicates global campaigns, where we’re used to centralising influencer strategy,” she added. “Practically, it means more fragmentation, more cost and more heavy lifting on measurement.”
Thomas Walters, co-founder and chief innovation officer at Billion Dollar Boy, said it was “too soon to be certain” whether this will lead to a “splinternet moment”, with the possibility that TikTok does not become a “walled-off US app”.
That would at least mean creators in the US could reach international audiences and brands continue to think cross-border, assuming non-US users opt to download the separate app.
If the US app were to be walled off from the rest of the world, brands would have to contend with navigating an additional buying platform, although Walters added that this scenario “appears unlikely”.
Nevertheless, he warned: “While this in itself wouldn’t post a major obstacle to brands and media agencies, it could impact buying efficiency. Additionally, organic and paid performance could be affected — especially for anglophone nations whose creators and brands often share some audiences.”
TikTok ban uncertainty led US creators to focus on rival platforms
Would social audiences shift?
The creation of a separate app could lead to uptake challenges for the US-based TikTok — a precarious notion given the swathes of short-form video competitors that have sprung up in the past five years.
“US audiences are incredibly sticky with platforms they’re already embedded in,” noted Slattery. “If creators migrate en masse, followers will go with them. But if the experience feels clunky or doesn’t carry the same network effect, you’ll see more people spending time on [YouTube] Shorts and [Instagram] Reels.
“It won’t be overnight, but the split weakens TikTok’s cultural hold and opens the door for competitors.”
For creators, uncertainty over the app’s future has led to anxiety over potential audience loss and whether followers will transfer over to new platforms. As Slattery pointed out, that could lead to reduced rates for creators.
The advice for creators is therefore to consider diversifying audiences across more platforms and pushing loyal followers to channels where they have greater control of their relationship with their audience.
Walters suggested that creators are likely to take a “wait and see” approach, reacting “once the dust has settled” by migrating to alternative platforms if necessary.
A trial run occurred in January, when TikTok was briefly banned in the US before the Trump administration reversed course and delayed the move. Walters noted that the 10,000 creator accounts Billion Dollar Boy tracked at the time generally shifted from TikTok to Shorts and Reels in near equal measure.
“The early signs for creators are encouraging that there is now a deal on the table and that the buyers are reputable, with intentions to protect their audiences and the existing algorithm,” Walters added.
Consolidating media ownership to allies
The buyers may well be “reputable”, but they are also known allies of an administration that has rapidly ramped up attacks on freedom of expression following the murder of far-right media personality Charlie Kirk.
Vice-president JD Vance, guest-hosting Kirk’s podcast on Monday, asked supporters to call the employers of individuals who celebrated Kirk’s death or did not otherwise sufficiently show remorse.
During his life, critics of Kirk said he had expressed a range of misogynistic, homophobic, transphobic, racist, antisemitic, pro-Russia and climate denialist views.
US attorney general Pam Bondi, who previously served as Trump’s personal defence lawyer, announced on Tuesday that she would “absolutely target” protesters engaging in “hate speech”.
The US constitution’s first amendment guarantees the right to free speech, which the US supreme court has repeatedly reaffirmed does not include an exception for hate speech.
Also this week, in a letter to social media leaders, Republican congressman Clay Higgins wrote that social platforms “are rightfully expected to expeditiously remove all posts that have celebrated the political assassination of Charlie Kirk”.
Furthermore, “the authors of these posts are to be identified and banned from your platform, as well as any new pages they may create”.
Meanwhile, the Trump administration this week filed a $15bn lawsuit against The New York Times, alleging defamation. Both legal experts and NYT have condemned the lawsuit as frivolous.
Within this context, Ellison’s part-ownership of TikTok would further engrain media ownership under billionaire tech moguls supportive of Trump.
Ellison is widely known to be friendly with Trump and was an early supporter of his first candidacy for president. Elon Musk (X), Mark Zuckerberg (Meta) and Jeff Bezos (The Washington Post and Amazon) have all aligned themselves to the Trump administration to varying degrees.
Along with his son David, the Ellisons now own Paramount and its broadcast news property CBS News. They are also reportedly working on a bid for Warner Bros Discovery, which owns CNN.
Owning TikTok and its algorithmic recommendation system would give the family enormous influence over the US information ecosystem at a time when the US government is cracking down on political dissent.
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