Trump's extension puts TikTok back on the clock

The big picture: It's not clear that Trump has the authority to issue the suspension, as he's given no evidence that TikTok has made progress toward a divestiture by ByteDance. But that won't stop attempts at a deal, and TikTok turned its lights back on Sunday afternoon after a short shutdown.

Between the lines: The bill required TikTok sell to an approved buyer by Jan. 19 to avoid running afoul of the bill, but it gives the President the ability to extend the ban if he makes "certain certifications to Congress regarding progress toward a qualified divestiture."

• But the executive order made no mention of any progress. And when Trump was asked by a reporter about how TikTok CEO Shou Zi Chew felt about a potential joint venture owning the business, Trump answered: "I think he'd probably like it because he has nothing."
• Perhaps due to this legal morass, service providers Apple, Google, Microsoft and Amazon — which would also be subject to fines under the law — had not re-added TikTok to their respective U.S. app stores as of early Tuesday.

The big question becomes who will call Trump out in his honeymoon period? Congress is unlikely to sue Trump, says Colin Costello of Freshfields, as that path has typically gone nowhere.

• But Republican Sen. Tom Cotton warned that there's no "legal basis" for an extension, and that companies that flouted the law could be sued by figures outside of the executive branch, "under securities law, shareholder lawsuits, and state AGs."

In the meantime, the idea of a sale is looking more likely than in previous months. China suggested on Monday that it would be open to a deal, in contrast to prior statements that it would block a forced sale of TikTok.

• Perplexity AI, last valued at $9 billion, also submitted a bid to merge with TikTok's U.S. unit, CNBC first reported — adding to a short list of known bidders that includes real estate mogul Frank McCourt.

• The Perplexity side is estimating that TikTok U.S. alone is worth more than $50 billion — meaning the combined entity is likely to be worth more, Axios has learned. The proposed deal currently doesn't have a set valuation.

Yes, but: Axios has learned that Perplexity's proposed deal doesn't include the algorithm, which has been a major sticking point for both the U.S. and Chinese governments.

• Trump would also have to consult with agencies to determine whether any deal is "qualified divestiture" under the law, which means it prevents ByteDance or China from controlling the algorithm or data.

The bottom line: If TikTok is to continue operating legally stateside, it won't just be thanks to Trump. It's likely that Congress will have to act again to give a further extension to provide time for a deal to come together, or repeal the law altogether.