2020 TikTok déjà vu
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Illustration: Maura Losch/Axios
President Trump yesterday said that Microsoft is among those in talks to acquire TikTok, or at least enough of TikTok that it would be allowed to continue operating in the U.S.
Why it matters: This new divestiture dance is beginning to feel like an imitation of what we saw five years ago.
- Maybe it's the Instagram Reels version?
Flashback: Microsoft offered to buy TikTok in 2020, after Trump first tried to have the social media app banned, but was rebuffed. For some reason, Trump claimed days later that Microsoft was still in talks.
- Oracle also was at the table, via a complex deal that never got CFIUS approval, and is reportedly kicking tires again.
- ByteDance's venture capitalists at the time expressed optimism that a solution would be found. Déjà vu.
- In 2020, Trump lost to TikTok in court and then seemed to lose interest — passing the baton to a Biden administration that was, at best, indifferent for its first few years.
Zoom in: There's an argument that the Trump administration has more leverage to force a divestiture in 2025 than it did in 2020, thanks to the law signed last year and upheld by the Supreme Court this month.
- But more has stayed the same than has changed.
- ByteDance's cap table remains fairly static, minus some secondary sales among VCs, and it still generates just a small fraction of its revenue from TikTok (estimated at between 6-10%). And it still can't sell without Beiing's blessing.
- Trump is still throwing out long-shot ideas. In 2020 it was a $5 billion "education fund" backed by TikTok (which Trump suggested was a done deal, even though it wasn't). Today it's the U.S. government taking a large equity stake in TikTok, which only Perplexity AI seems to view as viable.
Zoom out: Moreover, the few differences arguably work in the opposite direction.
- Trump is currently reveling in being TikTok's savior — via an executive order that appears to defy the law — and China is feeling its tech oats thanks to DeepSeek.
State of play: During a conversation in Davos last week, ByteDance director and General Atlantic CEO Bill Ford said that negotiations couldn't really begin until Scott Bessent was confirmed as Treasury secretary (and thus leads CFIUS). That happened late yesterday.
The bottom line: It's in everyone's interest to get something done, if only to remove the uncertainty. Just like it was in 2020.
