As Washington, D.C., and Silicon Valley sit on the edge of their seats awaiting the fate of TikTok after the Supreme Court upheld a law banning it if wasn’t sold by Jan. 19, one Boston billionaire is eyeing an “incredibly serendipitous” opportunity to buy the app from owner ByteDance and reconfigure the inner workings of the internet.
Last week, after several months of public interest, Frank McCourt and a group of coinvestors, including Shark Tank host Kevin O’Leary, sent ByteDance a formal offer to buy TikTok. Leading the bid is McCourt’s internet advocacy group Project Liberty. McCourt said he currently values TikTok—without its famed algorithm—at $20 billion. As of December 2023, the entirety of ByteDance’s global operations was estimated to be worth somewhere around $268 billion.
On Friday, the Supreme Court upheld the bipartisan law that forces TikTok’s Chinese owner, ByteDance, to sell its U.S. operations by Jan. 19 or be banned because of national security concerns. At the same time, President-elect Donald Trump, who is set to take office a day later, is mulling his options on how to stall a shutdown of the app, which seems imminent. Trump officials are reportedly drafting an executive order that would delay enforcement of a ban by either 60 or 90 days, according to the Washington Post.
However, owning the crown jewel of the internet’s youngest generations isn’t the endgame for McCourt. He has his gaze fixed on a broader goal: fundamentally altering how user data is handled on the internet. In technical terms, McCourt wants to build a decentralized version of the internet where individual users, rather than tech companies, own the reams of data spawned by their online lives. Users would then opt-in to having their data collected by certain companies, rather than having that be the norm, as it is on most websites and apps.
“The problem with our current Internet technology is that the data is being taken from us, scraped, stolen—call it what you will—as opposed to it being permissioned by the users, and it's being taken from us through different surveillance devices,” McCourt told Fortune.
McCourt, the former owner of the Los Angeles Dodgers and scion of a wealthy family of Boston industrialists, has long been a critic of the current business model of the internet, and social media companies in particular. In 2021, he founded Project Liberty as a think-tank- investment-vehicle hybrid to begin researching ways to wrest user data from tech companies’ control. He considers their constant hoovering up of data, which then gets sold and resold to advertisers, to be an invasion of privacy that places too much power in the hands of a select few Big Tech companies.
His Project Liberty envisions a model for social media in which it is users, not tech companies, that own their social graph—the complex web of data points used to map out their online personas and lives. It’s a novel concept that would require tech companies to fork over the secret sauce that allows them to micro-target their billions of users for digital advertisers. In McCourt’s ideal world, a user who owns their social graph could allow certain advertisers or other users access to it. For example, someone with a passion for fine wines might share that with a platform that would then tailor their social-media feed with videos of Burgundys, Barolos, wine influencers, and tours of lavish cellars around the globe.
Project Liberty has already piloted this idea on a small scale with MeWe, a social media also-ran that has roughly 20 million users and both free and paid offerings. McCourt’s company, McCourt Global, led MeWe’s Series A in 2022 with a $15 million investment. Only about one million of MeWe’s users currently use McCourt’s privacy-forward version of the app.
Buying TikTok and access to its 170 million U.S. users would serve as a proving ground for McCourt’s long-held ambitions to create an internet free of its current digital, corporate Big Brother.
“It would really catalyze this alternative internet because it would compress timelines and create scale very quickly,” McCourt said in an interview before the offer to ByteDance was made public.
Any deal to pry TikTok from the hands of an unwilling seller is already complex enough, even more so if they plan to upend the plumbing of the internet. But the complications don’t stop there. In the event TikTok does get sold, the buyer will almost certainly be getting a company with limited tech of its own. A potential TikTok sale would likely not include its coveted algorithm, which serves up video after video to audiences, because social media algorithms are subject to strict export controls in China. McCourt and O’Leary have both said they do not want or need the algorithm for their new vision for TikTok.
“Anybody that might be considering buying U.S. TikTok and is depending on the Chinese algorithm is just wasting their time,” McCourt said.
The pair's offer would include an acquisition of the TikTok brand, its user base, and the app’s vast content library of everything that’s been posted on the site, O’Leary said. Their new TikTok would build its own algorithm, McCourt added. Project Liberty would need to build a “clean tech stack” that is both powerful enough to support the countless hours of TikTok videos users watch and insulated from any possible Chinese interference so as to comply with the law.
But removing the algorithm from TikTok is not just a technical footnote in the sale. The algorithm is the beating heart of TikTok. Without it, users would still be able to post content, but they wouldn’t be served up the endless stream of videos perfectly tailored to their interests—everything from cake frosting videos to slam dunk compilations to the ever-popular “get ready with me” content.
“Essentially, you would get the platform, but you would rip out the engagement algorithm, effectively disconnecting all the important dots within the system that make content discovery even possible,” said Amir Kaltak, CEO of Own.App, a social media startup that also doesn’t collect data on users.
TikTok will remain an ad-based model, but having users opt-in to their interests will make ad spending more efficient, according to McCourt.
He estimates that in the event of a sale, the transition from the current iteration of TikTok to the new version would take approximately one year. In that case, TikTok would likely operate with an “off-the-shelf” algorithm that would keep the platform from shutting down completely, Kaltak said. Replicating the success of the original algorithm is a difficult task because the entirety of TikTok’s tech architecture is built for a centralized system, not the decentralized one McCourt envisions, he explained.
“You would have to gather the best data scientists you can get your hands on to make sense out of this huge chunk of data on user behavior in order to reconstruct a new algorithm that is going to match [the old one] and hopefully give them a great user experience,” Kaltak added. “That's essentially a lot of work.”
As a marquee tech company and one of the most popular social media platforms, the price of TikTok won’t be cheap. In addition to its investors, Project Liberty has secured a “significant commitment” on the debt side from one of the nation's largest banks, according to Project Liberty president Tomicah Tilleman. Investment bank Guggenheim Securities and the law firm Kirkland & Ellis are advising Project Liberty in the transaction. Details of the offer were not released. Tilleman declined to comment on investors.
A major outstanding question is how many of TikTok’s current shareholders will want to roll their stock into a new McCourt-O’Leary led vehicle and how many will want to cash out, according to O’Leary. “We don't know what that mix is yet,” he said. “I'm assuming the majority of them, who are not stupid, want the upside we're going to offer them in the new vision of Tiktok.”
ByteDance’s U.S. investors include VC firms General Atlantic and Sequoia Capital and trading firm Susquehanna International Group.
Another significant hurdle to any deal is that ByteDance does not want to sell. In fact, it has vowed to fight tooth and nail to avoid being forced to do so. Project Liberty sent Bytedance its official proposal last week, the day before the start of the Supreme Court oral arguments on whether to uphold the ban. That timing wasn’t coincidental, said O’Leary. It was meant to neutralize any of ByteDance’s potential arguments that there were no legitimate offers for TikTok, he said.
“We were concerned that the justices were going into their considerations for the Friday hearing under the assumption that the company claimed there were no American buyers because the Chinese government was not going to sell the algorithm,” O’Leary said.
So far, ByteDance appears unmoved by McCourt and O’Leary’s play. Indeed, ByteDance is preparing for the app to shut down rather than begin negotiating a sale. The few comments that have trickled out from TikTok employees maintained the party line that no sale was happening, while brushing off any offers. “These billionaires who are going around saying they are going to buy TikTok are nothing but peacockers and masqueraders,” a TikTok employee told Puck.
TikTok did not respond to multiple requests for comment.
As with any major corporate asset rumored to be on the market, there is more than one bidder eyeing the chance to snap it up at a bargain price.
Last spring, former Treasury Secretary Steve Mnuchin, who now runs the Washington, D.C.-based private equity firm Liberty Strategic Capital, announced his intention to put together an investment group to buy TikTok. His interest, or at least his public interest, has waned since then.
Similarly, former Activision CEO Bobby Kotick had a conversation about the logistics of training a new algorithm using large language models with a table of executives that included OpenAI CEO Sam Altman at an Allen & Co. dinner in March, according to the Wall Street Journal. Earlier this week, Bloomberg reported that Elon Musk, who already owns X, was an 11th hour candidate due to his support from the Chinese government. TikTok called that possibility “pure fiction.” Kotick declined to comment. Mnuchin and Musk did not respond to requests for comment.
Another notable threat to McCourt and O’Leary’s plans is the possibility that TikTok might not be sold at all. Trump’s nominee for solicitor general, John Sauer, submitted an amicus brief to the Supreme Court asking it to delay the deadline for a TikTok sale. As currently constructed, the law allows President Joe Biden to trigger a 90-day extension to the Jan. 19 deadline if TikTok is in the middle of negotiating a sale. Project Liberty is eager for the clause to be activated because it believes it can get a deal done in that time frame, according to Tilleman.
Enforcement of the ban will inevitably straddle two presidential administrations while remaining at the center of two of the country’s most pressing issues: national security and the brewing trade war with China. The national security issues that were the impetus for the law remain salient. However, TikTok’s importance to China as a source of national pride makes it an important bargaining chip in trade negotiations with Beijing that could encompass everything from tariffs to oil and natural gas, according to Frank Kelly, senior political advisor at global asset manager DWS.
“As President Trump has been coming out of the campaign, he's been thinking and talking internally about what they're calling a grand bargain with China,” Kelly said. “I have to think that whatever that bargain may be, this would have to be on the table as one of the things that could be included in it.”
Project Liberty is plotting its own grand bargain with Trump. “President Trump is good at deals and likes making deals. [McCourt] is good at deals and likes making deals,” Tilleman said.
But running in opposition to an incoming presidential administration’s priorities—even tangentially—could almost certainly spell the end of any TikTok bid, including McCourt and O’Leary’s. To press their case, O’Leary traveled to Mar-a-Lago to meet with Trump.
“Trump is going to get his wish,” O’Leary said. “He's going to keep the platform lit up. All he has to do is help us buy it.”
For now, the question for O’Leary and McCourt isn’t whether Trump wants to keep TikTok “lit up,” but rather if he’ll hand them the switch.
