In a surprising turn of events, Amazon has submitted a last-minute bid to acquire TikTok, the immensely popular video-sharing app, as it faces a critical deadline in April. This deadline necessitates TikTok's separation from its Chinese ownership to avoid a potential ban in the United States. According to three individuals familiar with the bid, various stakeholders involved in the negotiations do not seem to take Amazon's offer seriously.
The bid was communicated through an offer letter addressed to Vice President JD Vance and Commerce Secretary Howard Lutnick, as per a source briefed on the situation. This unexpected move by Amazon underscores the intense last-minute negotiations occurring in Washington regarding TikTok’s ownership. Lawmakers from both political parties have raised significant national security concerns about the app's ties to China, leading to the passage of legislation last year that mandates a sale of TikTok, effective January.
Former President Donald Trump, who has consistently vowed to support TikTok despite the associated national security risks, has postponed the enforcement of this law until a recently set deadline, even after the Supreme Court upheld the law unanimously. As the situation develops, Trump is scheduled to meet with senior White House officials on Wednesday to deliberate TikTok's future.
Insiders have indicated that ongoing discussions may lead to a deal that introduces several new U.S. investors, including Oracle, a leading technology firm, and Blackstone, a prominent private equity firm. This potential arrangement aims to navigate the complexities of a formal sale; however, it remains uncertain if this structure would comply with federal regulations.
Amazon's interest in TikTok is not entirely new, as the e-commerce giant has established some existing connections with the app. TikTok boasts a staggering 170 million users in the United States and has evolved into a significant platform for retail shopping, with influencers showcasing products to their audience. Although Amazon operates its own e-commerce initiative, known as TikTok Shop, many influencers continue to direct their followers to Amazon, earning commissions on their transactions.
Furthermore, Amazon has contributed to TikTok's technical infrastructure and previously attempted to develop a TikTok-like feature called Inspire within its app. This initiative, although initially high-profile, was perceived as unsuccessful in attracting consumers and was ultimately removed from the app this year.
Amazon is not the first retail giant to express interest in acquiring TikTok. Back in 2020, during the initial wave of pressure for TikTok to transition to American ownership, both Microsoft and Walmart made bids for the company. However, Amazon emerges as the most high-profile contender in the current bidding landscape. Other notable interest has been shown by billionaire Frank McCourt and Jesse Tinsley, the founder of the payroll firm Employer.com.
As the deadline approaches, the outcome of Amazon's bid and the future ownership of TikTok remain uncertain, but the stakes are undeniably high for all parties involved.
