New York-headquartered private equity major Blackstone is reportedly considering acquiring a minority stake in TikTok’s US operations. According to a report by Reuters, this initiative involves collaborating with existing non-Chinese shareholders of TikTok’s parent company, ByteDance – including Susquehanna International Group (holds around 15%) and General Atlantic – to spin off TikTok’s US operations into a separate entity and inject new capital.
Interestingly, the primary aim of this potential move is to reduce Chinese ownership in the new business to below 20%, in compliance with US legal requirements. Along with its financial impact, Blackstone’s involvement is even more notable given that its CEO, Stephen Schwarzman is a prominent Republican donor and Trump supporter who also has significant business stakes in China.
Meanwhile, the development follows a US law mandating ByteDance to divest TikTok by January 19, 2025 or face a ban. Actually, in April 2024, the US passed the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA), which requires foreign-controlled applications to divest their US operations. Clearly, this action originates from national security concerns that the Chinese government could access sensitive data of American users or manipulate content on the platform.
Even, at the start of this year (2025), the US Supreme Court upheld the constitutionality of PAFACA, effectively supporting the potential ban of TikTok in the US if divestiture does not happen. Following the Supreme Court’s decision, TikTok briefly ceased operations in the US.
However, after the regime shift in the US, under Donald Trump’s administration, a temporary relief emerged as he signaled openness to a deal, even considering tariff reductions if China approved the sale. Presently, TikTok US is facing a crucial deadline of April 5 to divest from its Chinese parent company.
Coming back to the current scenario, several companies and investor groups have expressed interest in acquiring TikTok’s US business. For example, Perplexity AI recently proposed a bid to acquire TikTok, aiming to transform the platform by open-sourcing its algorithm and enhancing personalization. Additionally, Oracle (which currently serves as a cloud-computing partner for TikTok) is also reportedly participating in negotiations to spin off TikTok’s US operations. The proposed plan includes Oracle taking a stake in the new entity and ensuring the security of American user data.
These developments become significant considering the widely popular but controversial social media platform – TikTok has an estimated 1.6 billion monthly active users worldwide (including 136 million in the United States).
