Several American luminaries in tech and finance are preparing bids to acquire TikTok, following recently introduced legislation mandating that its Chinese parent company, ByteDance, divest from the app or see it banned in the U.S. Key figures involved in potential bids comprise Steven Mnuchin, former U.S. treasury secretary; Bobby Kotick, ex-CEO of Activision Blizzard, who is potentially partnering with OpenAI CEO Sam Altman; Bill Ackman, chief of Pershing Square hedge fund; and Kevin O’Leary, the well-known ‘Shark Tank’ investor.
The attempted acquisition of TikTok faces significant hurdles. ByteDance must still secure approval from the Chinese Commerce Ministry, which previously expressed strong opposition to a sale. Another challenge is the app’s core algorithm, which is unlikely to be part of the sale, meaning successful buyers would inherit just the brand and user base, necessitating a complete technological overhaul. ByteDance has reportedly said it would rather see the app banned than give up control due to concerns over its algorithm.
Based on analyst valuations, the potential purchasing party would also need to inject upwards of $100 billion into the deal. Furthermore, the acquisition must withstand regulatory scrutiny, predominantly from the Federal Trade Commission. Due to existing antitrust concerns, this effectively eliminates big tech players like Meta and Apple from the acquisition race.
On Wednesday, Joe Biden signed into law legislation mandating that ByteDance divest from TikTok within one year or else downloads and updates of the app will be banned in the U.S. TikTok also faces controversy in Europe, where regulators have launched an investigation into the app’s age-verification process and its “addictive features.”
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