ByteDance, TikTok’s Chinese parent company, would prefer to shut down TikTok in the United States rather than sell it if legal means to fight a proposed U.S. ban fail, Reuters reported, citing four anonymous sources.
A sale is unlikely because the algorithms that power the short-video app are critical to ByteDance’s overall operations, the sources told Reuters, also noting that TikTok represents only a small portion of ByteDance’s total revenue and active users. the company.
Closing the application would therefore limit the impact on ByteDance’s activity and allow it to maintain control of its algorithm, they believe.
President Joe Biden recently signed legislation that would see TikTok banned in the United States unless ByteDance divests itself from the app within nine months to a year.
The move stems from concerns among US lawmakers that China could use the app for surveillance activities and to collect data on US citizens.
TikTok CEO Shou Zi Chew, however, said he was confident the company would win the legal challenge.
“We are confident and we will continue to fight for your rights in court,” he said. “The facts and the Constitution are on our side and we hope to prevail.”
The deadline to sell the app is January 19, 2025, but an extension is possible if ByteDance demonstrates progress toward a sale.
This follows a report earlier this week in The Information that ByteDance was exploring options to sell a majority stake in TikTok’s U.S. business.
The report, which cites three people with knowledge of the situation, says ByteDance would prefer to sell to a company in the non-tech sector and without abandoning the algorithm that recommends videos to app users.
ByteDance said rumors it was considering selling TikTok “are false.”
Business Insider has contacted ByteDance for comment.
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