ByteDance leans toward shutting down TikTok in US rather than selling

Despite pressure from the Biden administration to sell the app within a year or face a ban, ByteDance is leaning towards shutting down TikTok rather than relinquishing control. The company views TikTok's algorithms as integral to its operations and is hesitant to sell without them. 

ByteDance is facing a dilemma over TikTok in the US. A report from Reuters suggests that ByteDance is prepared to exhaust all legal avenues to challenge the legislation, with CEO Shou Zi Chew expressing confidence in winning such a battle. Despite TikTok's relatively small contribution to ByteDance's overall revenues and user base, the company is reluctant to sell to a US-based firm due to concerns about losing control over its core algorithms.

The recent bill passed by the US Senate, which threatens to ban TikTok unless sold to an American company, reflects ongoing concerns about data security and surveillance. TikTok's popularity in the US, with 170 million users, underscores the significance of this issue. President Biden has set a deadline for ByteDance to act but may extend it if deemed necessary.

Detaching TikTok from its algorithms, considered a trade secret, would be highly complex and undesirable for ByteDance. The company's assets extend beyond just algorithms to include user data and operational aspects. Despite interest from investors, such as former Treasury Secretary Steven Mnuchin, the absence of algorithms could deter potential buyers.

ByteDance's valuation, backed by prominent investors, further emphasizes the company's reluctance to part with TikTok without safeguarding its core technology.