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TikTok funds top creators to fend off rivals as Trump administration threatens ban

Wendy Lee, Los Angeles Times on

Published in Business News

TikTok on Monday pushed back against rivals eager to poach its U.S. video creators (and to lure their audiences), by financing a handful of influencers with large followings on its platform.

Nineteen creators, including six based in Los Angeles, will be the first to receive money from TikTok's $200-million U.S. creator fund, the company announced. TikTok said money will be given to the selected talents in regular payments over the coming year and declined to disclose financial details. At least one creator will receive a six-figure amount, according to a person with knowledge of that agreement.

"TikTok would not be the vibrant community that it is today without creators like these," said Vanessa Pappas, general manager of TikTok U.S., in a statement. "From redefining a category to venturing into uncharted waters, these creators are a huge part of TikTok and we're grateful for their ingenuity and creative spirit."

The push comes as TikTok, owned by China-based tech firm ByteDance, is scrambling to continue operating in the U.S. On Thursday, President Trump issued an executive order that would bar ByteDance from doing business transactions with American companies starting on Sept. 20, citing concerns that TikTok could give user data to the Chinese government. Trump said he is open to Microsoft buying TikTok's U.S. operations before then, provided that some of the proceeds go to the U.S. treasury.

TikTok maintains that it has not given and will not give U.S. user data to the Chinese government. The company says it is exploring all of its options, including a lawsuit.

Meanwhile, multiple rivals are lined up to capitalize on TikTok's predicament, including by poaching some of the app's star creators. For example, Instagram is offering money for creators to post content on its new short-form video feature, Reels, and several creators have defected from TikTok to L.A.-based music video app Triller, joining as investors. A former Vine creator has launched his own short-form video app, Clash.

 

Establishing a creator fund is "certainly not a new playbook," said Eunice Shin, a partner at consultancy Prophet. Companies including YouTube and Instagram have given digital creators money to work on original content for their platforms. TikTok CEO Kevin Mayer has called Reels a "copycat product," but many industry observers consider it to be TikTok's biggest threat.

"For TikTok to be competitive, they had to do it with money," Shin said.

Michael Le, a 20-year-old TikTok creator who posts dance videos, said he was worried when he heard about Trump's plans to file an executive order. Last month, he encouraged his fans to follow him on Instagram and YouTube. He called getting money from the creator fund "really dope and cool."

"Just hearing that, it was kind of giving me reassurance about them being really serious about staying," Le said of TikTok, where he has more than 36 million followers.

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