How the rebirth of TikTok could revolutionize the internet

SALT LAKE CITY — A group hoping to remake the internet around private digital identities said they have attracted enough investors to buy the social media company TikTok, which is set to be banned from the United States on Jan. 19 if it is not sold to an American business.

Project Liberty President and CEO Tomicah Tillemann told the Deseret News on Friday that following a weeklong "investor road show" in New York City, San Francisco and Utah, the company is ready to negotiate a bid if TikTok's owner, ByteDance, chooses to divest itself in compliance with a law Congress passed in April.

"We do not believe that capital will be an obstacle to Project Liberty completing a transaction around TikTok at this point," Tillemann said. "The response from investors has been extremely favorable."

Before the latest round of fundraising, Project Liberty said they had received commitments of more than $20 billion. That number is now up to more than $25 billion in expressions of interest, Tillemann said.

While TikTok is valued at around $100 billion, bidding is expected to begin significantly below that mark because the Chinese government has prohibited the sale of TikTok's software algorithm. It's uncertain what combination of TikTok's user base, content and branding that a prospective sale would include.

Representatives of TikTok did not respond to a request for comment before this story was published.

Why does Project Liberty want TikTok?

In April, Congress passed legislation requiring TikTok to be sold by its Chinese-based owner ByteDance or lose its access to American customers. The law came in response to allegations that the app, used by 62% of young adults and used daily by 58% of teenagers, was being leveraged by the Chinese Communist Party to conduct massive surveillance operations against the American people.

But Project Liberty isn't looking to turn back the clock on TikTok by perpetuating the same business model that has attracted lawsuits from dozens of states, including Utah. Instead, the group believes its purchase of TikTok would revolutionize people's relationship with the internet in a way the Beehive State might readily adopt.

"We are asking the internet to do a lot of things today that it was never intended to do, and that fact is at the root of a lot of the challenges that we are seeing with how this technology is intersecting with our lives, our communities and our families," Tillemann said. "And the solution to that has to come at the infrastructure level."

TikTok, which gives users a nearly infinite stream of automatically curated short videos, represents both the creative benefits of the internet as well as the drastic downsides of an internet infrastructure that incentivizes a device-centric "attention economy," Tillemann said. Project Liberty's aim is to transform the internet, beginning with TikTok, to create an identity-focused "intention economy."

A potential TikTok sale would give the platform's estimated 170 million American users the opportunity to migrate their content and followers to Project Liberty's alternative internet model, Tillemann said. This so-called decentralized social networking protocol is a new open-source internet system that gives every user total control over their personal data.

"Once you have 170 million people, you have real scale," Tillemann said. "And ultimately, that's what will be required in order to bring the full benefits of the vision that Project Liberty is advancing to a large number of people in the United States and beyond."

Why Project Liberty feels at home in Utah

The venture to buy TikTok, which is part of Project Liberty founder Frank McCourt's vision for "a more equitable web," has attracted investors for three reasons, Tillemann said.

First, it presents a unique financial opportunity to change a well-known application into a product that is more healthy for consumers who can better curate their internet experience, more transparent for content creators who can see how the algorithm actually works, and more direct for advertisers who can base decisions on information that users have made intentionally available.

Second, investors are interested in addressing what many people believe is a "broken" internet that depends on selling users' data, snagging eyeballs and shredding attention spans, Tillemann said, adding that these problems are most pressing in the context of young people. One of Project Liberty's main selling points in a place like Utah, he said, is that a blockchain-based internet identity would notify applications if a user is a child and would give parents greater control of their children's internet experience.

Utah has led the nation in holding social media companies like TikTok accountable for policies that harm minors, Tillemann noted. In October 2023, Utah sued TikTok, arguing that the company knew its app was habit-forming in a way that could harm teen mental health. Utah filed another lawsuit in June, alleging that the company also knew it earned profits from the sexual exploitation of young people via the livestream feature.

"Utah and Gov. Cox have been at the forefront of national efforts to build healthier, safer digital ecosystems for kids, communities and families. We respect and admire that commitment, and we fully anticipate that Utah will remain a leader in those efforts going forward," Tillemann said. "That respect is at the core of our engagement in the state, and we anticipate that we will have ongoing engagement in Utah, because there is clearly a willingness to think creatively and differently about how we can harness the incredible benefits of technology in a way that's going to align with our values rather than conflict with our values."

While a new owner of TikTok would inherit Utah's lawsuits, this would not pose a problem for Project Liberty, Tillemann said, because "as stewards of the platform," they would "take those challenges and turn them into solutions."

Third, Project Liberty represents a view held by what Tillemann calls "many of the most sophisticated investors on the planet," that an increasingly authoritarian and surveillance-based internet is having a negative impact on American democracy. The current medium of the internet is, in many ways, incompatible with democratic values like freedom, privacy and civil discourse, Tillemann said.

Americans can either allow their institutions to adopt the values and incentives of the current internet, or they can construct an internet that more closely reflects the principles "at the core of America's genius and progress over the last 250 years," Tillemann said. "That's part of why we are so committed to getting this right."

Will TikTok be banned?

But Project Liberty's aspirations, as well as TikTok's future, currently depends on the courts. While Project Liberty has reached out to initiate negotiations, ByteDance has not responded to Project Liberty's bid because they are hoping for courts to overturn the legislation passed earlier this year on First Amendment grounds, Project Liberty founder told Yahoo Finance this week.

On Dec. 6, the District of Columbia Court of Appeals upheld the law in a unanimous ruling. However, TikTok filed an emergency motion on Dec. 9 for the court of appeals to temporarily block the law to give the Supreme Court more time to consider the case, and to see whether the Trump administration, which enters office one day after the divestment deadline, says it will enforce the law.

If ByteDance does decide to divest before Jan. 19, the deadline will be extended for three months so the transaction can occur. When the TikTok divestment bill was first passed, a few other billionaire financiers, including former Treasury secretary Steven Mnuchin, expressed interest in organizing a bid. However, Project Liberty is the only bidder that has vocally expressed their continued interest in a deal.

If ByteDance does not initiate a sale by Jan. 19, and the courts do not intervene, then TikTok will be prohibited on internet browsers and app stores, with penalties for companies that don't comply.

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