Private equity giant Blackstone has pulled out of a consortium seeking to invest in TikTok's U.S. operations, a person familiar with the matter told Reuters on Friday. The latest changes come amid heightened uncertainty and several delays in the TikTok deal, which has become a focus of U.S.-China trade talks.
Blackstone originally planned to acquire a minority stake in TikTok's U.S. operations, orchestrated by President Donald Trump. The consortium is led by Susquehanna International Group and General Atlantic, two current investors in TikTok's Chinese parent company ByteDance. According to the agreement, Blackstone Group has become the leader of TikTok's US business. US investors will hold 80% of TikTok's shares, while ByteDance will retain a minority stake.
Blackstone declined to comment. TikTok has not yet responded to a request for comment.
ByteDance’s U.S. deadline for divesting the popular social media app has been repeatedly pushed back, creating uncertainty for investors.
Last month, Trump signed a third executive order extending ByteDance’s deadline to sell TikTok to September 17 or face a ban. In April 2024, Congress passed a law requiring TikTok to be sold or shut down by January 19, 2025.
Extending the deadline has drawn criticism from some lawmakers who say the Trump administration is "flouting the law" and ignoring national security concerns related to China's control of TikTok.
ByteDance is exploring options to address these concerns, including selling or restructuring its U.S. operations. Sources told Reuters that the Chinese social media giant had revenue of $43 billion in the first three months of this year, with quarterly revenue recently surpassing Meta's.
According to previous reports by Reuters, the U.S. consortium, which also includes new investors such as KKR and Andreessen Horowitz, is favored by the U.S. government in any TikTok transaction. Oracle may also take a stake. It is unclear whether there are other bidders in the consortium.
TikTok had planned to spin off its U.S. operations into a new U.S. company this spring. Negotiations were put on hold as China said it would not approve the deal after Trump announced hefty tariffs on Chinese goods.
If the deal is finalized, the new U.S. app is expected to be owned by a joint venture between a consortium of U.S. investors and ByteDance, which will hold a minority stake. TikTok is already developing an app specifically for the U.S. market, sources told Reuters.
Blackstone's exit underscores the complexity and uncertainty of the deal, as ongoing negotiations over TikTok's fate now form part of Trump's broader trade talks with China.