TikTok to Shutdown in US as ByteDance Prioritizes Algorithm Over Sale

ByteDance, the Chinese company behind the popular short-form video app TikTok, is prepared to shut down the US version of the platform rather than sell it without its core recommendation algorithm. 

This stance comes amid ongoing legal battles with the US government over national security concerns. 

Four sources familiar with the matter disclosed this to Reuters on Thursday, adding that ByteDance views TikTok's algorithm as essential to its entire business operation. 

Selling TikTok without it would be highly undesirable, even if it meant losing the US market, which represents a relatively small portion of its overall revenue and user base. 

These sources, who spoke on condition of anonymity, believe shutting down the app would have minimal impact on ByteDance financially, while also protecting their critical technology. 

ByteDance publicly denied plans to sell TikTok in a statement posted on their platform Toutiao. 

This contradicts a previous report suggesting they were exploring options for offloading the US business without the algorithm. A TikTok spokesperson declined to comment beyond referencing ByteDance's statement. 

Meanwhile, TikTok CEO Shou Zi Chew remains optimistic about their legal challenge against the recent US legislation that aims to ban the app. 

The bill, signed by President Biden, expresses concerns about potential Chinese government access to user data and potential use for surveillance. 

The legislation sets a deadline for a potential sale by January 19th, 2025, with the possibility of a three-month extension if the Biden administration deems progress is being made towards a satisfactory agreement. 

While financial details remain undisclosed, separate sources indicate that ByteDance's primary revenue stream comes from its Chinese market, with TikTok's US revenue contributing roughly 25% of the total. 

This situation highlights the escalating tensions between the US and China, with TikTok caught in the crossfire. Whether a compromise can be reached or if a US shutdown becomes a reality remains to be seen.