TikTok faces potential U.S. ban as users prepare for the impact
On January 18 TikTok users across the United States were abuzz with anxiety on Saturday as the prospect of a federal ban loomed, threatening to cut off access to the Chinese-owned app that has captivated nearly half of Americans, fueled small businesses, and shaped digital culture.
Late Friday, the company announced that it would cease operations in the U.S. starting Sunday unless President Joe Biden's administration assured tech giants like Apple and Google that they would not face enforcement actions once the ban is implemented.The ban, authorized by a law signed by President Joe Biden in April, would mark the first-ever shutdown of a major social media app in the United States. TikTok, which has approximately 170 million domestic users and is projected to generate $20 billion in revenue by 2025, faces a Sunday deadline to sever ties with its China-based parent company, ByteDance, or cease its U.S. operations to address national security concerns.
The ban, authorized by a law signed by President Joe Biden in April, would mark the first-ever shutdown of a major social media app in the United States. TikTok, which has approximately 170 million domestic users and is projected to generate $20 billion in revenue by 2025, faces a Sunday deadline to sever ties with its China-based parent company, ByteDance, or cease its U.S. operations to address national security concerns. The Supreme Court justices unanimously upheld the ban on Friday, and a White House statement indicated that President Biden is unlikely to take action to save TikTok before the deadline.
Without a formal decision by Biden to invoke a 90-day delay, companies providing services to TikTok or hosting the app could face legal risks. It remains uncertain whether TikTok's business partners—such as Apple, Alphabet's Google, and Oracle—will continue their collaboration with the app ahead of President Trump's inauguration on Monday.
Uncertainty about the app's future has driven users—primarily younger individuals—to seek alternatives, including the China-based platform RedNote. Competitors like Meta (META.O) and Snap (SNAP.N) have also experienced a rise in their stock prices this month, as investors anticipate an influx of users and advertising revenue ahead of the ban.
Marketing firms that depend on TikTok have been scrambling to develop contingency plans this week, with one executive describing the situation as a "hair-on-fire" moment, following months of widespread belief that a resolution would ensure the app's continued operation.
Signs suggest that TikTok could experience a resurgence under incoming U.S. President Donald Trump, who has expressed interest in pursuing a "political resolution" to the platform's uncertain future. Last month, Trump urged the Supreme Court to pause the implementation of a ban on the app.
On Friday, Trump stated that the decision regarding TikTok's future rests with him but provided no specifics on the steps he might take. Reports indicate he is considering an executive order to delay enforcement of the law requiring TikTok to either sell its U.S. operations or face a ban, potentially extending the timeline by 60 to 90 days.
TikTok CEO Shou Zi Chew is expected to attend the U.S. presidential inauguration on January 20, joining a group of high-profile guests invited by Trump, according to a source cited by Reuters.
Meanwhile, potential buyers, including former Los Angeles Dodgers owner Frank McCourt, have shown interest in the rapidly growing platform, which analysts estimate could be worth up to $50 billion. Media reports have also suggested that Beijing has engaged in discussions about selling TikTok's U.S. operations to billionaire Elon Musk, a known Trump ally, although TikTok has denied these claims.
ByteDance, TikTok's parent company, is privately held, with institutional investors like BlackRock and General Atlantic owning approximately 60%, and the remaining 40% split equally between its founders and employees. TikTok employs over 7,000 people in the U.S.
