Chinese technology conglomerate ByteDance has reaffirmed its stance of retaining ownership of TikTok, the immensely popular video-sharing platform, amidst new legislation in the United States that mandates its divestment or risk facing a ban.
The new law, enacted by US lawmakers, imposes a nine-month deadline for ByteDance to separate from TikTok, citing national security concerns and alleging potential espionage and propaganda risks associated with Chinese ownership.
Speculation emerged following a report by The Information, a US-based tech news outlet, suggesting that ByteDance was exploring strategies to sell TikTok, albeit without its proprietary algorithm responsible for recommending content to its vast user base exceeding one billion worldwide.
However, ByteDance swiftly refuted these claims, stating, “Foreign media reports about ByteDance exploring the sale of TikTok are untrue,” in a post on its Chinese-language platform Toutiao. The company explicitly stated, “ByteDance does not have any plans to sell TikTok.”
TikTok has long been embroiled in political and diplomatic controversies, notably during the administration of former President Donald Trump, who unsuccessfully sought to ban the platform. Despite allegations of ties to the Chinese government, TikTok has vehemently denied such associations and reiterated its commitment to safeguarding user data, including its $1.5 billion investment in “Project Texas” to store US user data within the United States.
Critics contend that concerns extend beyond data security and encompass TikTok’s recommendation algorithm, a pivotal component of its success. TikTok CEO Shou Zi Chew has indicated the company’s intent to challenge the new legislation in court, although experts speculate that national security considerations may supersede free speech protections.
Valued in the tens of billions of dollars, any mandated sale of TikTok would present formidable challenges, with potential buyers facing regulatory hurdles, including competition concerns. Moreover, the platform’s recommendation algorithm, viewed as a cornerstone of its appeal, poses additional complexities, as its sale would necessitate approval from Chinese authorities.
ByteDance’s global expansion has propelled it to become one of the world’s most valuable companies, with investments from prominent entities like General Atlantic, SIG, SoftBank, and others. Despite TikTok’s global prominence, it constitutes a relatively minor segment of ByteDance’s overall revenue, as highlighted by investor Mitchell Green, underscoring ByteDance’s steadfast commitment to retaining ownership of its prized asset.
