ByteDance denies plans to sell TikTok despite US divestment deadline
ByteDance, the Chinese technology conglomerate, has officially refuted claims that it is considering the sale of TikTok following new US legislation that threatens to ban the app unless it is divested within nine months.
US legislation challenges TikTok’s ownership
The new US law cites national security concerns, alleging that TikTok could be utilized by the Chinese government for espionage and propaganda as long as it remains under ByteDance’s ownership.
This has set a strict nine-month deadline for the company to sell the popular video platform or face prohibition in the United States.
ByteDance’s response to sale rumors
Contrary to reports by The Information suggesting that ByteDance was exploring a sale of TikTok minus its key video recommendation algorithm, the company has dismissed such speculation.
“Foreign media reports about ByteDance exploring the sale of TikTok are untrue,” ByteDance stated on its Chinese-language platform Toutiao.
The firm emphasized its commitment to retaining ownership of TikTok, highlighting the platform’s strategic importance to its global business model.
TikTok’s ongoing battle with US regulators
TikTok has been at the center of US-China tensions for years, facing scrutiny since the Trump administration’s unsuccessful attempts to ban it.
The platform has consistently denied any connections with the Chinese government and reassured that US user data has not and will not be shared with Beijing.
As part of its efforts to safeguard user data, TikTok has invested approximately $1.5 billion in “Project Texas”, which ensures that US user data is stored domestically.
The significance of TikTok’s algorithm
Critics argue that TikTok’s user data isn’t the only concern; the app’s highly effective recommendation algorithm also poses a potential risk and should be separated from ByteDance’s control.
However, the sale of such technology by a Chinese company would require approval from Beijing, which has previously declared these algorithms as protected technology.
International stakes and investor perspectives
Despite the global popularity of TikTok, it accounts for only a small fraction of ByteDance’s overall revenue. ByteDance, which has seen rapid growth and is valued as one of the world’s most valuable companies, has significant investments from US firms like General Atlantic and SIG, as well as Japan’s SoftBank.
According to ByteDance investor Mitchell Green of Lead Edge Capital, even if TikTok were to be expelled from the US market, the impact on ByteDance’s overall business would be minimal.
“If it was kicked out of the US, we would not sell,” Green stated, underscoring the firm’s resilience and long-term strategy.
ByteDance’s firm stance sets the stage for a potential legal battle over the new regulations, with TikTok CEO Shou Zi Chew indicating plans to challenge the law in court.
This legal confrontation could ultimately test the balance between national security and free speech rights in the US.
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