If you want to predict TikTok’s future, look to the past

Headlines are flying about what will happen to TikTok. Zealous investors are putting together bids, and everyone involved is trying to ingratiate themselves with the new administration while also parsing complex digital geopolitics. 

But if you want to figure out what will happen to TikTok, you should just look to the past. Many don’t remember — probably because our memories in the age of social media are short and the time frame was clouded by the depths of the pandemic — but nearly this exact situation has come up before. 

The upshot: this isn’t going to be a straightforward sale, and it’s probably not going to be to the names you’re hearing about right now. Here’s why.

In late 2020, the OG anti-TikTok president, Donald Trump, wrote an executive order effectively forcing a sale of TikTok for national security reasons. His Treasury secretary, Steven Mnuchin, helped broker the deal for TikTok along with the government’s Committee on Foreign Investment in the US, according to reports. 

Oracle, Microsoft, and Walmart all tried to get a piece of TikTok. Ultimately, the deal that the government and the companies involved drew up wasn’t structured as an outright sale, or even officially called a sale at all. 

Oracle was chosen as TikTok’s “trusted tech partner” and Walmart was included in the deal, which would have hived off TikTok from ByteDance and called it “TikTok Global.” Oracle would have owned 12.5% of TikTok Global, and Walmart would’ve had 7.5%. There were also some weird mental gymnastics happening, where the entity was going to be considered partially owned by US stakeholders because ByteDance was already 40% US-owned at the time, which would help TikTok Global qualify as being controlled by the US.

Of course, the deal never went through, in part because China lobbed a bunch of legal challenges and partly because the presidency changed hands. When the Biden administration came into power, Trump was no longer around to enforce his executive order. TikTok rapidly expanded for a couple of years before the ban conversation spun back up and Congress passed one.

What we’re seeing right now are investors like Frank McCourt, Mr. Wonderful (Shark Tank’s Kevin O’Leary), and social media star MrBeast trying to play in a sandbox that is much bigger than they’re equipped for. O’Leary has loudly said “we have the cash” when referencing his TikTok offer of $20 billion, but $20 billion would far undercut the value of TikTok’s business. It would be like me walking into a Porsche dealership and telling them “I have the cash” while flashing $20,000. I wouldn’t get to walk away with the keys.

This is all reminiscent of when Silicon Valley Bank folded in 2023 and there were constant reports of venture capitalists and PE firms trying to lob white-knight bids to buy the bank and save the beating heart of VC. 

At the end of the day, SVB got sold to a boring bank in North Carolina, not the gunslinging VC types. Why? Because First Citizens Bank had the money, the infrastructure, the wherewithal, and the actual industry knowledge to make the integration happen. 

A big part of a TikTok deal will involve resolving sensitive national security issues. The situation was similar in 2020, but back then the ban was enforceable only by an executive order. Now it’s a law, passed by Congress and signed by the president, with more distinct parameters.

At the time of the 2020 deal, Mnuchin explained on CNBC, “From our standpoint, we’ll need to make sure that the code is, one, secure — Americans’ data is secure, that the phones are secure — and we’ll be looking to have discussions with Oracle over the next few days with our technical teams.”

I’m not sure whether MrBeast has a way to quickly house sensitive information that has been heretofore accessible and controllable by the Chinese government, but I’m pretty sure Oracle and Microsoft do.

Not to be overlooked is Trump’s continued relationship with Larry Ellison and other leaders of Oracle. In August of 2020, before a deal was brokered, Trump said: “I think Oracle is a great company, and I think its owner is a tremendous guy. He’s a tremendous person. I think that Oracle would be certainly somebody that could handle it.”

And who stood up on stage next to Trump to announce a humongous AI infrastructure deal earlier this week? Oh right, it was Larry Ellison. Trump has also had a solid relationship with Oracle CEO Safra Catz, who served on his transition team in 2016, has contributed to his campaign, and has advised him on business matters.

ByteDance board member Bill Ford recently told Bloomberg, “There are a number of alternatives we can talk to President Trump and his team about that are short of selling the company that allow the company to continue to operate, maybe with a change of control of some kind, but short of having to sell.” 

That’s the type of signal you should be looking for, folks. There are many reasons a deal should eventually happen: Trump doesn’t want to look bad to a young demographic that helped deliver him the election, or to look like he’s soft on China. ByteDance investors want their money. Shou Chew wants to keep running his business. China’s only real choices are to cede control or lose TikTok altogether. And American tech giants are going to be happy to take on a rapidly growing business targeted toward young people and get some clout with the president at the same time. 

But the process and the outcome are going to be anything but straightforward.