TikTok's US Operations Valued at $50B if Sold, $20B Without Algorithm

Previously valued at $60B, TikTok is now worth $40–$50B due to regulatory concerns linked to its China-based company, ByteDance.

By Thea Felicity

Jan 16 2025, 08:51 AM EST

Supreme Court Hears Arguments In ByteDance And TikTok Case — WASHINGTON, DC - JANUARY 10: TikTok educational influencer, Tiffany Cianci livestreams outside the U.S. Supreme Court Building as the court hears oral arguments on whether to overturn or delay a law that could lead to a ban of TikTok in the U.S., on January 10, 2025 in Washington, DC. Kayla Bartkowski/Getty Images

For now, it seems upcoming US President Trump cannot save TikTok yet, leaving the Bytedance-owned company to sell its operations at a value that ranges between $40 billion and $50 billion, or shut it down.

If ByteDance, the parent company of TikTok, pushes through with selling, the valuation is going to be aligned with the huge user base it maintains in the US, which already boasts 115 million monthly mobile users, a number not as large as that of Instagram.

Even with this price, TikTok has already diminished its value. CNBC shared that in March 2024, the estimated value of TikTok's US operations was above $60 billion, but concerns over the app's ties to China and its role in US national security have lowered this estimate. This price drop also accounts for a shift in industry standards, and analysts suggest that the US operations may now be worth closer to $30 billion to $35 billion. But this would not include the company's recommendation algorithms, which are an important component of its success, thus lowering the overall value.

Challenges in TikTok US Assets Sale

Now, there are challenges in selling TikTok's US assets.

Potential buyers such as Elon Musk, who has expressed interest in acquiring the platform, would face high regulatory scrutiny, especially concerning data privacy concerns. This would make any expansion plans complicated, especially in the advertising business of TikTok, which relies much on its algorithms. These challenges have led a group of investors, including billionaire Frank McCourt and Kevin O'Leary, to propose a bid of up to $20 billion for the US operations without the algorithms, Forbes reported.

The potential sale remains linked to more general concerns and the US government related to security for using TikTok, especially after its ownership issues by ByteDance, the Chinese company which owns it, has been given a lot of regulatory scrutiny hurdles that any purchaser would have had to overcome data privacy related issues and problems with national security.

It is yet to be known whether ByteDance will opt for selling TikTok or not. American users have already migrated to a Chinese-owned app, called Red Note, but will still await the decision on January 19.