Thanks for reading The Briefing, our nightly column where we break down the day’s news. If you like what you see, I encourage you to subscribe to our reporting here.
Greetings!
Our long international nightmare may soon be over. Both China and the U.S. seem to be in agreement about the terms under which TikTok U.S. will be sold to a new company majority-owned by Americans, judging by a statement overnight from a Chinese government official. We don’t know the details, including the full investor lineup in the new TikTok, whether the U.S. government will take a stake (as Trump earlier this year suggested should happen) or the price being paid. A longer-term question is how the new U.S.-only version of TikTok will fare as a business.
In sheer revenue terms, TikTok America (as the company was to be called as of earlier this year) is likely to be second among social media firms to Meta in revenue, well ahead of other social media firms like Snap, Pinterest, X and Reddit. That’s based on our report in April that TikTok parent ByteDance’s international revenue—primarily TikTok—rose 63% to $39 billion in 2024. Even if TikTok only accounts for $30 billion of that, the U.S. version seems likely to be the majority of that.
The U.S. is the world’s biggest ad market and accounts for the majority of the revenue of smaller social media firms. (One wild card is TikTok’s shopping business, which may be more international). Even so, it seems reasonable to think TikTok America is at least a $20 billion-a-year revenue business. In comparison, Snap generated $5.4 billion last year, while Pinterest was even smaller.
TikTok’s ad business should be able to grow quickly, once the longstanding uncertainty about its future disappears. What we don’t know is the company’s profitability. Our past reporting on ByteDance’s finances suggested that, at least in 2023, TikTok was nowhere close to turning a profit. That could have changed in 2024, given the top-line growth. But there are a few variables that could affect the profitability of the new U.S.-only TikTok. One is the likelihood that TikTok will have to staff up, not only to make up for people leaving amid the uncertainty over the past year, but also to replace functions previously handled by ByteDance. That could raise its expenses.
Another variable which could affect TikTok’s business prospects is its relationship with the U.S. government. Earlier this year, President Donald Trump said the government should get a stake in TikTok as a condition of allowing it to stay alive. That doesn’t look as outlandish as it might have a few months ago, given that the government is now a shareholder in Intel. Still, the idea of the government being a shareholder in one of the main sources of news for many Americans is likely to raise some eyebrows. Perhaps Trump will settle for a revenue share, as he’s arranged with Nvidia for its Chinese AI chip revenue. We reported earlier this year that some bidders for TikTok had discussed giving the government a 50% revenue share—that seems like a lot!—or half of the proceeds from a future sale.
How this plays out will likely be a big issue for investors in the new company, expected to include Oracle and Andreessen Horowitz, among others. Surely they don’t want to cripple TikTok’s chances of making money by splitting its revenue with the government—unless their participation is just a way to suck up to Trump. Nowadays, one never knows.
Workday’s Sana Deal
AI is proving a godsend to investment bankers—and not because it’s saving them time (although it may be doing that). A growing number of older enterprise software firms are snapping up AI minnows, in hopes of strengthening their own businesses. The latest was Workday’s $1.1 billion acquisition of Swedish firm Sana, which makes AI agents, services that take action on user’s behalf.
The deal follows Atlassian’s purchase of an AI browser, The Browser Co., for $610 million and ServiceNow’s $2.85 billion acquisition of Moveworks, which sells AI assistants to deal with IT request tickets. As we wrote in this piece two weeks ago, bankers are predicting more such deals. Watch this space.
In Other News
• YouTube announced new video creation features for creators, using its Veo 3 video generation model, integrating generative AI deeper into the massive video platform.
• Navan is planning to make public its initial public offering paperwork on Friday, two people with direct knowledge of the deal said, marking one of the final steps toward a long-awaited listing for the travel software startup.
• Google announced the launch of Agent Payment Protocol Tuesday, a new open-source protocol it says will enable agents to handle payments and transact on behalf of users across the web. More here.
Today in The Information’s TITV
Check out today's episode of TITV in which MongoDB's former product head talks about his new role at Index Ventures and how he has seen product management change in the era of AI.
Recommended Newsletter
Introducing: Applied AI. This new newsletter explores how businesses and leaders are using AI to innovate, improve efficiency, and foster collaboration. Stay ahead with insights and stories on the transformative power of AI. Sign up here.
Join The Information and IBM for a cocktail reception and discussion on how AI is reshaping sports and its fans. From player performance and coaching tactics to media viewing and spectator engagement, AI is changing the game at every level.
The Information's Katie Roof will host a panel discussion on the evolving landscape of public listings and exit opportunities during SF Tech Week, in partnership with NYSE.
Reserve your spot for The Information’s WTF 2025 Summit. With AI reshaping business, volatile markets, and rising political uncertainty, the boldest women are coming together to lead through change.
