After the Supreme Court allowed a ban on TikTok to stand, which was scheduled to take effect on Jan. 19 unless the app was sold, a Boston billionaire sees a “serendipitous” chance to purchase the app from its owner ByteDance and overhaul its inner mechanics.
There are plans to buy out TikTok. Leading this bid is Project Liberty, an internet advocacy group formed by McCourt. McCourt estimates the value of TikTok, excluding its popular algorithm, to be $20 billion. As of December 2023, ByteDance, the company that owns TikTok, is estimated to be worth around $268 billion.
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However, owning the crown jewel of the youngest generations of the internet isn’t the end goal for McCourt. He is aiming for something bigger: transforming the way user data is managed on the internet fundamentally. In technical terms, McCourt wants to create a decentralized version of the internet where individual users, rather than technology companies, own the vast amounts of data generated by their online lives. Users would then choose to allow certain companies to collect their data, rather than having that be the standard practice, which it is on most websites and apps.
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He views their continuous collection and sale of personal data to advertisers as a serious invasion of privacy that enables a select few large technology companies to wield too much power.
—the intricate network of information points used to create a detailed picture of individuals’ online identities and activities. It’s a new concept that would force tech companies to reveal how they allow digital advertisers to precisely target their vast number of users. In McCourt’s ideal scenario, a user who owns their social network could grant certain advertisers or other users access to this information. For instance, a person with a passion for fine wines might choose to share this with a platform, which would then tailor their social media feed with videos about Burgundys, Barolos, wine enthusiasts, and tours of luxurious cellars around the world.
McCourt’s version of the app that prioritizes privacy.
Purchasing TikTok and its access to 170 million U.S. users would serve as a proving ground for McCourt’s long-held goals of creating an internet free from the digital, corporate control that currently exists.
“Having this happen would greatly accelerate the development of this alternative internet by significantly compressing timelines and allowing it to scale up very rapidly,” McCourt stated in an interview prior to the ByteDance offer being made public.
In China. McCourt and O’Leary have both stated that they do not desire or require the algorithm for their new vision of TikTok.
People thinking they can buy U.S. TikTok and then use the Chinese algorithm are just giving up time,
The pair’s proposal includes acquiring the TikTok brand, its user base, and its massive library of past posts, O’Leary stated. The new TikTok will develop its own algorithm, McCourt noted. Project Liberty will need to create a “clean tech infrastructure” that is both strong enough to handle the enormous amount of TikTok videos users watch and protected from any potential Chinese interference to comply with the law.
But taking the algorithm off TikTok is more than just a minor detail. It’s actually the main system that makes the app work. Without it, users would still be able to post videos, but they wouldn’t see the constant stream of content that’s specifically chosen for them, including everything from cake decorating videos to awesome basketball highlights to the popular “get ready with me” footage.
“Essentially, you’re getting the platform, but you’re removing the algorithm that helps people discover content, which is a key part of how the system works,” said Amir Kaltak, CEO of Own.App, a social media startup that doesn’t collect user data.
McCourt says TikTok will continue to rely on ads for revenue, but by letting users choose specific interests, the company can improve the effectiveness of its ad spending.
He estimates that in the event of a sale, it will take roughly one year for the current version of TikTok to make the transition to a new version. At that point, TikTok would likely continue to run on a pre-established algorithm that would prevent the platform from shutting down entirely, Kaltak said. According to Kaltak, replicating the success of TikTok’s original algorithm will be a challenging task because the core technology of TikTok’s architecture is designed for a centralized system, not the decentralized one McCourt envisions.
It would require recruiting skilled data scientists to analyze a massive amount of user behavior data, in order to develop a new algorithm that meets the old one’s standards and provides an excellent user experience. That’s a significant undertaking.
As a leading tech company and one of the country’s most popular social media platforms, you can bet that the price of TikTok won’t be low. In addition to its investors, Project Liberty has secured a “significant commitment” on the debt side from one of the country’s biggest banks, said Tomicah Tilleman, Project Liberty’s president. Management firm Guggenheim Securities and law firm Kirkland & Ellis are advising Project Liberty on this deal. Unfortunately, details of the offer aren’t being made available. Tilleman also wouldn’t comment on the names of the investors involved.
A major outstanding question is how many of TikTok’s current investors will decide to roll their shares into a new investment vehicle led by McCourt and O’Leary, and how many will instead choose to cash out, according to O’Leary. “We don’t know what that balance is yet,” he said. “I’m assuming the majority of them, who are not foolish, want the potential gain we’re going to provide them in this new vision of TikTok.”
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Another major obstacle to reaching an agreement is that ByteDance is not interested in selling. In fact, it has threatened to fight strongly to prevent being forced to do so. Project Liberty sent Bytedance its formal proposal last week, just before the Supreme Court hearing on whether to uphold the ban began. According to O’Leary, this timing was no coincidence – it was meant to counter any arguments ByteDance might make that there were no legitimate offers for TikTok.
“We were worried that the justices were heading into their deliberations on Friday under the assumption that the company claimed there were no U.S. buyers because the Chinese government wouldn’t sell the algorithm,” O’Leary said.
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TikTok did not respond to repeated requests for comment.
When a major corporate asset is rumored to be up for sale, multiple potential buyers are drawn in, eager to make a purchase at a discounted price.
His interest has lessened since then.
The candidate was made an eleventh-hour candidate due to his backing from the Chinese government. TikTok dismissed the possibility outright as “pure fiction.” Officials with both Knixin and Musk did not provide comment to our requests.
For a proposed TikTok sale, the current law allows President Joe Biden the ability to extend the January 19 deadline by 90 days if negotiations with TikTok are ongoing. Project Liberty wants this clause used, as they believe they can reach a deal within that three-month timeframe, according to Tilleman.
The ban on TikTok will take place across two presidential terms, and its enforcement will be tied to two major US concerns: national security and the escalating trade conflict with China. The initial reasons for the ban, focusing on national security, are still valid. Nevertheless, TikTok holds significant value to China as a source of national pride, likely making it a key point of leverage in trade talks with Beijing, which could involve various negotiations over tariffs, oil, and natural gas, according to Frank Kelly, a senior political advisor at DWS.
“As President Trump has been campaigning, his team has been brainstorming and discussing internally what they’re referring to as a major deal with China,” Kelly said. “I have to believe that whatever this deal turns out to be, this would be one possibility for inclusion.”
Project Liberty is putting together its own deal with Trump. “President Trump is skilled at deals and has a strong taste for making deals,” Tilleman said, “and McCourt is skilled at deals and has a strong taste for making deals.”
But going against an incoming president’s agenda, no matter how small, might essentially mean that any TikTok bid, including McCourt and O’Leary’s, would be in big trouble. To make their argument, O’Leary went to Mar-a-Lago to meet with Trump.
He’s going to get what he wants,” O’Leary said. “He’ll keep the platform active; we just need his assistance in purchasing it.
For now, the question for O’Leary and McCourt is whether Trump will hand them the control, rather than keeping TikTok operating as is.
