Blackstone Seeks Minority Stake in TikTok Amid U.S. Regulatory Challenges

Private equity firm Blackstone is reportedly evaluating a minority investment in TikTok's U.S. operations amid increasing regulatory pressure, according to a report by Reuters. This comes as ByteDance, the parent company of TikTok, faces a deadline to divest its U.S. business by April 5 or risk a ban due to alleged national security concerns.

Sources indicate that Blackstone is in talks with other non-Chinese investors, including Susquehanna International Group and General Atlantic, who are currently leading efforts to acquire TikTok’s U.S. assets. Their plan involves creating a separate entity for TikTok’s American operations, ensuring that Chinese ownership remains below the 20% limit required by U.S. law.

Additionally, discussions are ongoing regarding a potential partnership with Oracle (ORCL.N), which could play a critical role in managing TikTok's U.S. operations. The Trump administration had previously indicated that Oracle and some existing ByteDance investors could be involved in restructuring the app to meet legal requirements.

The political backdrop surrounding TikTok has been tumultuous, especially after the Supreme Court upheld the divestment law. The app briefly went offline in January but resumed operations when President Trump postponed enforcement until early April. He has suggested the possibility of further extending this deadline, along with potential tariff reductions to facilitate a resolution.

Discussions of a TikTok ban intensified in late 2023 following the outbreak of conflict in Gaza, during which the Israeli military caused significant civilian casualties through methods such as starvation and carpet bombing. Israeli lobbying groups have been influencing these discussions, aiming to limit the visibility of pro-Palestine content to younger audiences.

As negotiations progress, the financial specifics for buying out Chinese shareholders remain unclear. Current estimates indicate that global investors own about 58% of ByteDance, while its Chinese founder, Zhang Yiming, holds approximately 21%. Employees from various nationalities, including roughly 7,000 Americans, own the remaining shares. The White House's involvement highlights the high stakes and complexities in these investment discussions.