ByteDance, the parent company of TikTok, is weighing the possibility of shutting down the app in the United States rather than selling it, as reported by Reuters, citing insider sources.
This development comes amidst mounting legal challenges triggered by legislation aiming to remove the platform from US app stores.
Insiders reveal that the sale of TikTok, along with its crucial algorithms integral to ByteDance’s operations, is highly unlikely.
The recent enactment of a bill by US President Joe Biden seeks to ban TikTok from operating within the country, adding pressure on ByteDance to divest its US business within a nine-month timeframe or face expulsion.
Concerns over potential data sharing with the Chinese government have fueled the legislation, although TikTok has consistently refuted such allegations.
Despite TikTok contributing modestly to ByteDance’s revenue and user base, the company is reportedly inclined to opt for a US shutdown rather than a sale to an American buyer in the worst-case scenario.
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Insiders, preferring anonymity due to media restrictions, suggest that ByteDance’s core algorithm would persist even in the event of a shutdown, exerting minimal impact on the company’s financial standing.
ByteDance has abstained from commenting on the matter, but a statement on Toutiao, its media platform, refutes any plans to sell TikTok.
Meanwhile, TikTok CEO Shou Zi Chew remains optimistic about overcoming legal hurdles posed by the recent legislation, despite the company boasting 170 million American users and generating a significant portion of its revenue from the US market.
The algorithm underpinning TikTok’s functionality is deemed a vital asset for ByteDance, rendering a sale improbable. The algorithm, synonymous with TikTok’s success, tailors content on the ‘For You’ page to individual user preferences, yet it has also sparked debates on national security due to alleged data privacy concerns.
