In a significant move amidst regulatory challenges, Amazon has reportedly made an offer to acquire TikTok. This comes as the popular video-sharing app faces a critical deadline to be divested from its China-based parent company, potentially avoiding a ban in the United States set to unfold this month.
A former official from the Trump administration revealed to Reuters on Wednesday that Amazon sought to secure TikTok ahead of the anticipated restrictions.
According to a report by The New York Times, which cited insiders familiar with the negotiations, Amazon’s bid for full ownership of TikTok has not been taken seriously by the involved parties. The proposal was presented to Vice President JD Vance and Commerce Secretary Howard Lutnick.
Last year, Congress enacted a law prohibiting the operation of apps like TikTok that are owned by companies based in countries deemed adversarial, including China, Russia, Iran, and North Korea, following a 270-day divestment period. President Donald Trump has expressed a desire to keep TikTok operational in the U.S. and issued an executive order extending the divestment deadline, now set for this Saturday.
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When reached for comment, Amazon did not provide a response regarding its interest in acquiring TikTok.
Other potential buyers have emerged for TikTok, including a consortium known as Project Liberty, spearheaded by billionaire Frank McCourt and investor Kevin O’Leary.
Despite the pressure to sell, TikTok has remained resistant to the idea, largely due to opposition from the Chinese government, which holds the power to block sales of companies based in China.
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Reporting by Finance Newso Business’ Charlie Gasparino indicates that a potential TikTok deal is on the horizon that would establish a new company with majority U.S. ownership. However, investors have expressed concerns over legal liabilities related to the pending ban, which may require additional time for resolution.
The anticipated deal would allow TikTok’s Chinese owners to maintain a minority stake of less than 20% in the restructured company, while its original source code would continue to be utilized but under surveillance in Oracle’s cloud system to prevent security breaches.
Under the proposed agreement, TikTok’s valuation would be set at $40 billion if the current source code is part of the acquisition, or $20 billion if it is excluded.
Reuters contributed to this report.
