TikTok will pay up to $2 billion to content creators

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To prepare for a major fight with Facebook, TikTok, the short-video platform will pay popular users more than $2 billion in the next three years, according to a press release update Wednesday.

TikTok first promised $200 million to U.S. users through its TikTok Creator Fund last week, but upped the fund to $1 billion in the U.S. and “more than double that globally” because it turns out people like free money.

The upgrade came one day after the Wall Street Journal reported that Facebook was offering to pay popular creators to use its upcoming Instagram Reels platform.

Reels, which is reportedly just TikTok but on Instagram, would be Facebook’s latest attempt at matching Gen Z’s new favorite app. Facebook shut down its first experiment, Lasso, earlier this month.

U.S. users will be allowed to apply for the TikTok money starting in August, according to the release.

However, TikTok is battling to remain in the US as President Trump plans to ban the company.

ByteDance has agreed to divest the U.S. operations of TikTok completely in a bid to save.

Earlier today, President Trump said he has decided to ban the popular short-video app, Reuters quoted an anonymous source on Saturday.

ByteDance was previously seeking to keep a minority stake in the U.S. business of TikTok, which the White House had rejected. Under the new proposed deal, ByteDance would exit completely and Microsoft Corp would take over TikTok in the United States, the sources said. Some ByteDance investors that are based in the United States may be given the opportunity to take minority stakes in the business, the sources added.

Under ByteDance’s new proposal, Microsoft will be in charge of protecting all U.S. user data, the sources said. The plan allows for another U.S. company other than Microsoft to take over TikTok in the United States, the sources added.

The White House did not respond to a request for comment on whether Trump would accept ByteDance’s concession.

Both Microsoft and ByteDance did not respond to a request for comment.

Peter Cohan advised that investors should buy Microsoft shares if the company pays up to $5 billion for TikTok.

“If Microsoft acquires TikTok’s U.S. operations for the roughly $5 billion I estimate they are worth, you should buy its shares. With LinkedIn slowing down — posting 10% growth in the June-ending quarter, the triple digit acceleration of TikTok’s user base could accelerate Microsoft’s top line,” he said.

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