ByteDance, the Chinese parent company of popular social media app TikTok, may choose to shut down the app in the US rather than sell it, according to Reuters. This decision comes as ByteDance faces a proposed ban on TikTok in the US unless it divests itself of the app within the next nine months to a year.
The sources cited by Reuters stated that a sale of TikTok is unlikely due to the importance of the app's algorithms to ByteDance's overall operations. Despite TikTok making up only a small portion of the company's total revenues and active users, the algorithms are crucial to ByteDance's business.
President Joe Biden recently signed legislation that would ban TikTok in the US over concerns that China could potentially use the app for surveillance and data gathering on US citizens. TikTok's CEO, Shou Zi Chew, expressed confidence in the company's ability to win the legal challenge and stated that they would continue fighting for their rights in court.
The deadline for ByteDance to sell TikTok is set for January 19, 2025, with a possible extension if progress is made towards a sale. A report from The Information suggested that ByteDance may be exploring options to sell a majority stake in TikTok's US business, preferably to a non-tech industry company without giving up the algorithm that recommends videos to users.
ByteDance has denied rumors of plans to sell TikTok, stating that they are untrue.