"Behind the Scenes: A Revised Proposal Could See US Government Own Up to 50% of TikTok

Behind the Scenes: A Revised Proposal Could See US Government Own Up to 50% of TikTokAs the debate surrounding TikTok's ownership and security risks continues, a new proposal has emerged that could significantly impact the social media platform. Perplexity AI, an artificial intelligence startup, has presented a revised plan to ByteDance, TikTok's parent company, which would allow the US government to own up to 50% of a new entity formed by merging Perplexity with TikTok's US business.The Revised Proposal: A Path ForwardPerplexity initially proposed creating a new structure that would merge San Francisco-based Perplexity with TikTok's US business and include investments from other investors. The revised plan, submitted last week, takes into account feedback from the Trump administration.According to sources familiar with the matter, the proposal would allow the US government to own up to half of this new entity once it makes an initial public offering (IPO) of at least $300 billion. However, the government's shares would not have voting power and would not be represented on the new company's board.What Does This Mean for TikTok?If the plan is successful, ByteDance would not be forced to completely sever ties with TikTok, which is a positive outcome for its investors. The proposal does require ByteDance to allow a "full US board control," meaning that the new company would have control over TikTok's US operations.In addition, ByteDance would contribute TikTok's US business without the proprietary algorithm that fuels what users see on the app. This move is seen as a compromise between the Trump administration's concerns about TikTok's ownership structure and ByteDance's desire to maintain some level of control over its subsidiary.A Similar Strategy?The proposal bears some resemblance to a strategy discussed by Steven Mnuchin, treasury secretary during Trump's first term. In an interview on Fox News' Sunday Morning Futures, Mnuchin suggested that a new investor in TikTok could simply "dilute down" the Chinese ownership and satisfy the law.Mnuchin also emphasized the need for the technology to be disconnected from China, stating, "There's absolutely no way that China would ever let us have something like that in China."A Deal in the Works?The proposal comes as several investors are expressing interest in TikTok. President Donald Trump has stated that he expects a deal will be made within 30 days.Trump also revealed on Air Force One that numerous people, including CEO Larry Ellison of software maker Oracle, are interested in acquiring TikTok's global operation. However, Trump emphasized that any deal would need to benefit the United States.The Road AheadAs the debate around TikTok's ownership and security risks continues to unfold, one thing is clear: the US government is committed to ensuring that TikTok does not pose a risk to national security. Whether this proposal will ultimately be successful remains to be seen, but it marks an important step in the ongoing saga surrounding TikTok's fate.What's Next for Marketers?As marketers, we're left wondering what this proposal means for our industry. Will we see more changes in the way we interact with social media platforms like TikTok? Only time will tell, but one thing is certain: the future of marketing on TikTok will be shaped by the outcome of this proposal.Stay InformedWant to stay up-to-date on the latest developments in the world of marketing and social media? Stay tuned for our next blog post, where we'll dive deeper into the implications of this proposal for marketers in 2025.

Edward Lance Arellano Lorilla

CEO / Co-Founder

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