Trump grants TikTok a temporary respite in America
In a series of recent announcements, the fate of popular social media app TikTok in the United States has been the subject of much discussion. Here's a breakdown of the latest developments.
The anticipated agreement between U.S. President Donald Trump and Chinese President Xi Jinping, set for Friday, is expected to finalize the future of TikTok in the U.S. The app, which has been at the centre of a political storm, has been granted an additional 75-day grace period, extending its availability in the U.S. until at least December 16.
The new U.S. subsidiary of TikTok will be majority-owned by a consortium of American investors, including Oracle, Silver Lake, and Andreessen Horowitz. This consortium also includes current ByteDance shareholders such as Susquehanna International Group, General Atlantic, KKR, and Andreessen Horowitz. The remaining 20% of the new subsidiary will remain with Chinese shareholders.
Oracle, backed by Trump supporter Larry Ellison, will retain its role as TikTok's technical service provider in the U.S. Despite this, the software will continue to use the algorithm developed in China to determine which videos are shown to users in the U.S. This raises concerns among critics who see this software as a potential risk for the U.S. government to influence public opinion.
Bytedance, the parent company of TikTok, has been under scrutiny due to its Chinese origins. Despite being headquartered in the Cayman Islands and having international investors owning 60% of the company, Bytedance has a large headquarters in Beijing and is subject to many Chinese regulations. Founder Zhang Yiming and his team hold only a 20% stake in Bytedance but reportedly control the company due to shares with more voting rights.
TikTok and Bytedance have consistently denied that the software poses a risk for government influence. Trump, however, has been vocal about his concerns, repeatedly extending the grace period for TikTok despite there being no basis for this in the law. Interestingly, Trump has recently emphasized that the app has helped him in the election campaign, especially in mobilizing young voters.
The latest announcements suggest that the current pause in the sale of TikTok meets the requirement for a one-time extension of 90 days in case of successful sales negotiations. The U.S. law requires that neither the Chinese government nor Bytedance have control over the algorithm, a condition that remains to be seen in the final agreement.
As the deadline approaches, the future of TikTok in the U.S. remains uncertain, with both supporters and critics eagerly awaiting the final decision.
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