AppLovin proposes merger with TikTok Global, targeting $80B ad market outside China

AppLovin has formally proposed a strategic merger with TikTok Global, aiming to consolidate TikTok’s operations outside China. Rather than a full acquisition, the proposal outlines a partnership structure that would allow AppLovin to assume operational control, particularly in areas of data governance, content moderation, and advertising technology.

The proposed merger is centered on three focal points: national security, youth content safety, and economic expansion through advertising optimization. According to AppLovin, TikTok’s current ad revenue outside China—estimated at $20 billion in 2024—could surge to $80 billion if integrated with AppLovin’s proprietary Axon AI advertising model. The company argues that ongoing restrictions related to data security and algorithmic transparency have significantly limited TikTok’s monetization capabilities, despite its massive global user base of over 1.1 billion daily users outside China.

AppLovin CEO Adam Foroughi stated that the lack of data control and regulatory trust has stifled TikTok’s ability to implement advanced advertising strategies. “Without new governance, this value may remain permanently out of reach,” Foroughi said. Axon AI, which has already quadrupled advertiser spend within AppLovin’s ecosystem, is positioned as the key differentiator that could transform TikTok’s ad performance.

The merger proposal includes a framework for managing data and content in a way that aligns with regulatory standards across different jurisdictions. AppLovin plans to implement safeguards for data privacy and reduce algorithmic bias, positioning itself as a partner capable of bringing TikTok into compliance with Western data practices. Additionally, the company proposes stricter age-appropriate content moderation protocols, aiming to strike a balance between youth protection and freedom of expression.

From an economic standpoint, AppLovin projects that integrating its AI with TikTok’s advertising could unlock tens of billions in incremental revenue. The company estimates that an increase of $60 billion in ad revenue could translate into $120 billion in overall business revenue globally—potentially creating over one million jobs, many within the U.S. and allied economies.

Despite the scale of the proposal, Foroughi acknowledged the challenge ahead. “Let’s be clear: this is a long shot,” he said. “But we’re not here for small bets. Our vision is to reshape the future of advertising by building one of the most valuable ad ecosystems on the planet.”

Separately, AppLovin is divesting its gaming business to Tripledot for $400 million, with an expected 20% equity stake in Tripledot upon deal closure by early summer 2025. This move reflects AppLovin’s broader strategic pivot toward advertising-focused growth beyond the gaming vertical.

The TikTok proposal marks a bold step in AppLovin’s push to expand its footprint beyond mobile gaming and redefine the economics of digital advertising at a global scale.