TikTok could lose functionality in the US if China does not approve a sale by the stipulated deadline as stated by Lutnik.
In a developing saga surrounding the popular video-sharing app TikTok, a consortium of U.S. investors, led by Oracle and including venture capital firm Andreessen Horowitz and private equity firm Silver Lake Management LLC, has proposed to take over TikTok's U.S. operations.
The proposed deal comes amidst ongoing controversy over the app's ties to China and potential national security risks. Commerce Secretary Howard Lutnick has stated that if China does not approve the deal, TikTok must stop operating in the U.S.
Lutnick also emphasised the importance of American control over the algorithm that powers TikTok, stating that if a deal is approved, Americans will own the technology and control the algorithm. This sentiment was echoed by Lutnick, who said that under the proposed deal, Americans would have control over TikTok's future.
However, the deal has faced opposition from some Democratic lawmakers, who argue that it may not meet legal requirements and question Trump's authority to extend the deadline for the sale or shutdown of TikTok.
The deadline for the sale or shutdown of TikTok was initially set for Jan. 19, as mandated by a 2024 law. However, President Trump extended the deadline to Sept. 17, citing national security concerns. The Justice Department has also irrevocably relinquished any claims against companies providing services or hosting the TikTok app.
In a move to further pressure TikTok, Attorney General Pam Bondi sent letters to Apple, Google, and other companies, urging them to cease providing services or hosting the app. TikTok has not yet commented on the situation.
Despite the ongoing controversy and legal challenges, Lutnick remains optimistic, stating that decisions about TikTok's future are coming soon. The original deadline for a sale or shutdown of TikTok was Jan. 19, but the deadline was extended to Sept. 17.
In the spring, a deal was in the works to spin off TikTok's U.S. operations into a new U.S.-based firm, majority-owned and operated by U.S. investors. The letters from the Justice Department regarding the extension of the deadline were made public this month.
As the Sept. 17 deadline approaches, it remains to be seen whether a deal will be reached and TikTok will continue to operate in the U.S., or if the app will go dark due to China's refusal to approve the sale of its U.S. assets.
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