TikTok owner ByteDance reportedly would rather shut down the popular video-sharing app than sell it if the Chinese-based company exhausts all legal options to fight a US ban – despite growing interest from American buyers for the platform.
The algorithms TikTok relies on for its operations are deemed core to ByteDance’s overall operations, which would make a sale of the app with algorithms highly unlikely, sources close to the parent said.
TikTok’s CEO Shou Zi Chew vowed on Wednesday that the social media company will wage a legal war after President Joe Biden signed a law forcing ByteDance to sell the app in 270 days or face a ban.
On Thursday, ByteDance shot down a report by The Information saying it was exploring scenarios for selling TikTok’s US business without the algorithm.
The company posted on Toutiao, a media platform it owns, that it had no plan to sell TikTok, which accounts for a small share of ByteDance’s total revenues and daily active users.
A shutdown would have limited impact on ByteDance’s business while the company would not have to give up its core algorithm, said the sources, who declined to be named as they were not authorized to speak to the media.
ByteDance declined to comment.
A TikTok spokesperson told The Post: “The Information story is inaccurate.’
The Information’s report also noted that even in a selloff of its US business, TikTok wouldn’t give away its precious algorithm.
This secretive algorithm, which tailors each TikTok user’s “For You” page to include videos designed to appeal to their individual interests, has been at the center of political debates on whether the app should be barred in the US.
Some officials have argued that TikTok’s confidential algorithms have allowed third parties in China to spy on American users, threatening national security.
TiTok has already said that it would challenge the the new law in court, calling the US government’s efforts to ban the short-form video-sharing platform “unconstitutional.”
“Rest assured — we aren’t going anywhere,” TikTok CEO Shou Zi Chew said in a video posted moments after Biden signed the bill, giving ByteDance 270 days to divest TikTok’s US assets.
“The facts and the Constitution are on our side and we expect to prevail.”
Supporters of the new rule have advised ByteDance to ditch its TikTok fans in the US to allow the social media platform to keep running.
“It doesn’t have to be this painful for ByteDance,” Rep. Raja Krishnamoorthi, an Illinois Democrat and bill co-sponsor, recently posted on X. “They could make it a lot easier on themselves by simply divesting @tiktok_us. It’s their choice.”
Though ByteDance has since squashed hopes of a sale, wealthy American finance and tech tycoons were reportedly gearing up to make multibillion-dollar bids to buy TikTok.
Among the suitors: Steven Mnuchin, the former treasury secretary, as well as Activision Blizzard’s former chief Bobby Kotick, who has been reported to have spoken to OpenAI CEO Sam Altman about a possible proposal.
There were also rumors that outspoken Pershing Square hedge fund boss Bill Ackman and “Shark Tank” multi-millionaire Kevin O’Leary would place a bid.
Unfortunately for these deep-pocketed aspiring TikTok owners, ByteDance appears to be staying true to a comment from China’s Commerce Ministry last year, which said that it’s strongly opposed to any sale.
Representatives for TikTok and ByteDance did not immediately respond to The Post’s request for comment.
Should TikTok actually be barred in the US, app stores like those operated by Apple and Google would be subject to civil penalties if they continued to distribute TikTok.
The TikTok app would also lose its ability to update on US phones, meaning it would lose compatibility with the latest versions of iOS and Android and cease to function.
The app is already on millions of phones in the US, but the bill’s passage would force internet service providers to block access to TikTok, according to software-centric blog Lifehacker, effectively shutting down access to the platform whether it’s already on a device or not.
This is exactly how the Indian government went about barring the app, citing national security threats, Lifehacker noted.
With Post wires
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