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1
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· Posted on
February 21, 2024

TikTok is stuck between a rock (USA) and a hard place (China) and it's tough to please them all

TikTok may be forced to divest from its Chinese owner Bytedance if it wants to stay in the US.

What's the key learning?

  • TikTok is undergoing a national security review in the US, which would force the Tok to create a wall between its data and the Chinese government.
  • If an agreement is not landed, TikTok may be forced to divest from its Chinese owner Bytedance to remain in the US.
  • Over the years, China has been known to use regulations to stop its tech champions from being successful on a global scale.

👉 Background: TikTok is the highly addictive social media platform that shows us part educational, part gossip, part GRWM-mind-numbing content. Its users spend an average of 89 minutes a day on the app.

👉 What happened: For the past few years, TikTok has been under scrutiny for its Chinese ownership. Now, TikTok is undergoing a national security review in the US, which would force the Tok to create a wall between its data and the Chinese government.

👉 What else: But, if an agreement is not landed, TikTok may be forced to divest from its Chinese owner Bytedance if it wants to stay in the US.

What's the key learning?

💡The political tensions between China and the US extend well beyond the political sphere.

💡Over the years, China has been known to use regulations to stop its tech champions from being successful on a global scale:

  • In 2021, Chinese officials opened a cybersecurity probe into the ride-hailing company, Didi, after its listing on the New York Stock Exchange.
  • Ant Group, the largest fintech in China, had its $34 billion IPO suspended after its founder, Jack Ma, made critical comments of the Chinese government.

💡So it seems like TikTok is between a rock and a hard place… trying to please the US government and the Chinese government at the same time.

‍

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