- ByteDance would rather shut down TikTok in the US than sell it, Reuters reported, citing four unnamed sources.
- President Joe Biden recently signed legislation into law that could lead to TikTok being banned in the United States.
- ByteDance has nine months to a year to divest itself of the company under this legislation.
ByteDance, TikTok's Chinese parent company, would rather shut down TikTok in the US than sell it if legal means to fight the proposed US ban fail. Reuters Citing four unnamed sources.
The sources told Reuters that a sale is unlikely because the algorithms that power the short-form video app are central to ByteDance's overall operations, also noting that TikTok makes up only a small portion of the company's total revenue and active users.
They said shutting down the app would limit the impact on ByteDance's business and allow it to retain control of its algorithm.
President Joe Biden recently signed legal legislation that will result in TikTok being banned in the US unless ByteDance divests itself from the app within the next nine months to a year.
The move stems from concerns among US lawmakers that China may use the app for surveillance and data collection activities on US citizens.
However, TikTok CEO Shou Zi Chew said he was confident the company would win the legal challenge.
“We are confident and will continue to fight for your rights in the courts,” he said. “The facts and the Constitution are on our side and we expect them to prevail.”
The deadline for the sale of the app is set at January 19, 2025, but it could be extended if ByteDance shows progress towards a sale.
The ensuing report in the information Earlier this week, it said ByteDance was exploring options to sell a majority stake in TikTok's US business.
The report, which cited three people familiar with the situation, said ByteDance would prefer to sell to a non-tech company and without giving up the algorithm that recommends videos to app users.
ByteDance said rumors that it plans to sell TikTok are “not true.”
Business Insider has reached out to ByteDance for comment.
