Chinese tech giant ByteDance recently stated it has no intentions to sell TikTok despite a new US law imposing a deadline for divestment from the popular video platform or facing a ban in the United States.
US lawmakers mandated a nine-month deadline citing national security concerns, alleging potential misuse by the Chinese government for espionage and propaganda as long as ByteDance owns TikTok.
Despite reports suggesting ByteDance was exploring TikTok’s sale without its proprietary algorithm, ByteDance refuted such claims, affirming there are no plans for TikTok’s sale.
TikTok has long been embroiled in political and diplomatic controversies, previously targeted by the Trump administration’s attempts to ban it. However, TikTok vehemently denies any ties to the Chinese government and assures it does not share US user data with Beijing.
In response to the new law, TikTok launched “Project Texas,” committing approximately $1.5 billion to store US user data within the country.
Critics emphasize the necessity of disconnecting TikTok’s recommendation algorithm from ByteDance, considered pivotal to its success.
TikTok’s CEO has expressed intentions to challenge the law in court, although some experts speculate that national security concerns might supersede free speech protection in the US Supreme Court.
For potential buyers, TikTok’s estimated valuations in the tens of billions present substantial hurdles. Competition concerns could deter US tech giants from acquiring TikTok, while any sale of its algorithm by a Chinese company requires Beijing’s approval.
Despite TikTok’s global popularity, it represents a minor fraction of ByteDance’s revenue. ByteDance, enjoying significant growth, remains a valuable entity, with international investors holding stakes worth billions.
Investors affirm TikTok’s significance within ByteDance’s broader landscape but assert their commitment to the company even in scenarios of US expulsion.
