Why that $14 billion TikTok deal may not be what it seems

• JD Vance says a new deal values the US portion of TikTok at $14 billion.
• Huh? That seems crazy low for an enormously powerful tech platform.
• But that $14 billion number may not be what it seems.

Here’s a head-scratcher: When is $14 billion not actually $14 billion?

When it’s a TikTok deal.

At least that’s what it looks like. Vice President JD Vance says a plan to give American companies and investors control of US TikTok values that asset at $14 billion. And that number seems way, way too low.

But now we have a possible explanation: That $14 billion valuation isn’t the real number — at least not to ByteDance, the Chinese company that owns TikTok globally and would be ceding control of its US business.

Bloomberg reports that ByteDance would get at least 50% of US TikTok’s profits if the deal goes through — despite the fact that in the new structure, it would only own 20% of the spun-off company.

Those payments would come via a combination of license fees and profit distributions, Bloomberg says. (The Bloomberg story doesn’t carry a byline, which suggests it may have been filed by a reporter based in China.)

I’ve asked the White House, TikTok, and ByteDance for comment. It’s important to note that this is not a done deal, and the Chinese government has yet to confirm that it’s agreed to it.

But if that report is correct, it goes a long way toward solving the puzzle the Trump administration posed on Thursday, when it floated that $14 billion number. Because $14 billion seems like a crazily low price for one of the most powerful media platforms in the US.

For instance, right now, investors value Snap, the social media and messaging service, at $14 billion. Yes, that price gives you all of Snap’s business worldwide, instead of just the US. But which business would you rather own?

Or consider this: Last year, the Financial Times reported that TikTok generated $16 billion in US sales in 2023. It has presumably grown since then, which would mean the new TikTok valuation prices the company at much less than 1x revenue. That’s way below tech companies like Snap (~2.5x), Pinterest (~6x), or Roblox (~23x).

Again, you can imagine discounting the value of US TikTok a bit since it’s a domestic-only company compared to its competitors’ global reach.

But there are plenty of people who’d like to own US TikTok, and all of them would be delighted to get it for $14 billion.

There’s another plausible reason for that fire-sale price, by the way: That this is actually a fire sale.

In a normal reality, ByteDance would never part with the US portion of its TikTok business. Which is very likely the most valuable piece of its business, given the premium advertisers place on American audiences.

But the law President Joe Biden signed in 2024 forces ByteDance to find non-Chinese owners and operators for its American unit, or shut it down entirely. (The fact that Trump has ignored this law — and told US companies like Oracle and Apple to ignore it — since January is another story.) That gives the US and its corporate allies leverage: you may not like our price, but it’s better than zero.

The flip side: 170 million people in the US use TikTok, and few politicians want to be blamed for taking away millions of people’s favorite app. So ByteDance had some ability to push back, too.

Which means this might just be an old-fashioned compromise: The Trump administration can say it got its favored investors into a huge tech company at a big discount. And China can claim it got a deal that’s much better than people think.

All of which reminds us that the TikTok deal isn’t a business deal — it’s a political one. And how it works depends on who’s counting.

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