TikTok and U.S. Reportedly in Talks on Possible Partnership

According to sources, ByteDance and the U.S. government are discussing avoiding a full sale of TikTok’s U.S. operations. Although President Trump issued an executive order for ByteDance to do so by a November 12 deadline, the Chinese government restricted the export of AI technology, making the sale more difficult. One possibility is that TikTok will partner with a U.S. company that would help secure its data. Sensor Tower reported that, again, TikTok was the most downloaded non-gaming app globally in August 2020.

The Wall Street Journal reports that, “even if there isn’t a full sale, the outcome would likely involve some sort of restructuring of TikTok.” U.S. government officials are mainly concerned with “the security of TikTok’s data and keeping it out of reach of the Chinese government.” Trump, however, has stressed that a U.S. company must buy TikTok, so “it isn’t clear whether any alternative would satisfy his concerns.”

Treasury Department spokeswoman Monica Crowley stated the department is “focused solely at this time on discussions associated with the sale of TikTok in accordance with the August 14 divestiture order signed by the President.”

With China’s new restrictions on exporting AI technology, “one question is whether the order would prevent TikTok’s all-important algorithms from being included in a deal.” Sources “close to the bidders” said that, without these, “the platform becomes much less attractive.”

The administration’s main concern is to implement “restrictions on where data is stored and who has access to it,” and “could become part of a set of regulations expected soon from the administration on implementation of a separate executive order Trump signed last year that initially targeted Huawei Technologies.”

One source reported that, “a group including a representative from at least one of TikTok’s major investors — Sequoia Capital, General Atlantic and Coatue Management — met last week … with representatives from the Central Intelligence Agency to discuss data security.”

Social Media Today reports that, according to Sensor Tower, in August 2020, TikTok registered 63.3 million installs, a 1.6 percent increase from August 2019. The report stated that, “the countries with the most installs of the app during this period were Indonesia at 11 percent of its total downloads and Brazil at 9 percent.” With the ban in India, those numbers have helped keep TikTok top of the charts. Up until now, “India, the U.S. and Turkey have been TikTok’s biggest markets.”

It adds that, “right now, TikTok is reportedly serving some 689 million monthly active users … [and] given the ongoing interest, it could easily become the next billion-user platform, if it can avoid a U.S. ban, and ideally, re-enter the Indian market.”

Related:
ByteDance May Miss U.S. Deadline for TikTok Deal, Reuters, 9/10/20
TikTok Joins Europe’s Code on Tackling Hate Speech, TechCrunch, 9/8/20
TikTok Is Paying Creators. Not All of Them Are Happy, Wired, 9/10/20
NBA Cracks the TikTok Code as U.S. Takes Aim at World’s Hottest Media App, Forbes, 9/10/20
Inside TikTok’s Killer Algorithm, Axios, 9/10/20