TikTok needs to unload its American operations soon now that President Joe Biden signed a new law that prohibits ByteDance, its Chinese parent company, from continuing to operate the popular media service in America. After President Biden signed the new law, TikTok was left with 270 days to find a new owner for its American operations, or it will be forced to cease all activity in the US, and investor Steve Mnuchin is reportedly now in the lead to be the one to do just that.
At least that is what the New York Post reported after the President signed the new law. The Post also listed Bill Ackman and his Pershing Square Capital as a possible suitor. Even Saml Altman, head of OpenAI, may get it.
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The new law is being called a “divest-or-ban” measure. It was passed due to concerns that since the Chinese government has ownership in TikTok and the US government has concerns that Chinese intelligence uses the popular app to spy on its users, collecting not only personal data for marketing purposes but also information on anything that could be related to US national security matters.
However, this question of who gets to be the owner of a new independent American TikTok may be moot. Reuters reported that ByteDance is likely to let the app be shut down in America rather than sell it because TikTok US accounts for a very small share of its revenue. This means ByteDance may prefer to just let it die in America to spite that country’s government’s move. The company may also be wary of the need to share TikTok’s proprietary algorithms with another firm should it allow for an independent American TikTok to be formed.
On Thursday, ByteDance issued a statement on Toutiao, a media platform the company owns, that it had no plans to sell TikTok.
TikTok is a popular social media app known for short-form videos. Users can watch and create videos that range in length from 3 seconds to 10 minutes, covering a wide variety of topics including comedy, dance, education, DIY, food, and more.
As with Instagram, users can “go viral” and make a lot of money from advertising if they make posts that become popular enough. These people are known as “influencers.”
However, TikTok has also become known for allowing the proliferation of disinformation – patently false reports and unsubstantiated statements about subjects like medicine and science – as well as hate speech. In the aftermath of the October 7 massacre it became a platform for outright lies about Israel ranging from accusing the country of enacting a genocide in Gaza to denying the October 7 attack even took place. This was also true of other social media services like Twitter and Instagram.
Steven Mnuchin, who was treasury secretary in the Trump administration, established Liberty Strategic Capital soon after he left office in 2021 together with former US Ambassador to Israel David Friedman. The firm is based in Washington and has an office in Tel Aviv.
