ByteDance, the owner of the TikTok app, is under pressure from two countries. They are cornered by the US forcing them to sell TikTok in the US if they want to continue operating here. However, the deal could fall apart with the new rules from China.
China’s Ministry of Commerce on August 29 added artificial intelligence technology to the list of goods that need to be controlled when they export. Specifically, “data analytics-based personalized content suggestion tool” and many other technologies are listed as goods for both civilian and military use, and overseas sales will be subject to damage. limit.
TikTok’s “secret weapon”
While this list does not directly mention TikTok, the video suggestion system is considered to be one of the app’s most powerful features. Based on an algorithm developed by ByteDance engineers, TikTok will suggest the next video that is most relevant and engaging to users.
The New York Times identified this algorithm, called “for you page” by TikTok as TikTok’s most valuable asset.
Each time you touch, surf and watch a video on TikTok, users will add one data point to this platform. TikTok collects those billions of data points, injects them into its massive machine learning tool to train artificial intelligence to predict the most relevant next video, possibly keeping users on the longest. This is the “esoteric recipe” that helps keep viewers on TikTok.
This formula can be cultural, for example using videos from China or India to attract American viewers. It can be based on catchy music or catchy dance. It is also possible to rely on the attractive effects available only on TikTok. Even the current TikTok can pull data from Douyin, its domestic version, to make recommendations to international users.
Eugene Wei, a longtime leader in the tech world, says FYP is like the Harry Potter home-choice hat, a machine that analyzes the right choices based on user behavior.
Previously, many experts said it would be difficult for new owners of TikTok to operate this application, as well as they, are without buying the FYP algorithm. However, ByteDance is likely to only sell TikTok in the US and some markets and continues to control FYP.
This will be a hurdle for new owners of TikTok if the deal takes place. Even after buying the algorithm, new owners will have to “start over,” said Karl Higley, an engineer who was involved in building the proposal system on Spotify.
“In order to be able to personalize apps for existing customers, they’ll need historical data from US users, otherwise they’ll have to start over. This could be a terrible experience for them. users, “Mr. Higley shared with the New York Times.
TikTok’s narrow door gap
“If ByteDance wants to sell related technologies, they will have to go through the licensing process,” Cui Fan, a professor of international trade in Beijing, told Xinhua.
This process can take up to 30 days and will make the negotiation process between ByteDance with any partner more complicated. US President Donald Trump previously signed a decree requiring ByteDance to sell TikTok before November 12 if he still wants to operate in the US market.
Kevin Mayer, CEO of TikTok just resigned last week, writing in his farewell letter that he hopes the company “will soon reach a solution”. According to Nikkei, this idea can be understood that TikTok has found a suitable partner to sign a sale contract.
Microsoft is the most mentioned name in this deal. Microsoft CEO Satya met with Mr. Trump in early August to discuss the acquisition of TikTok. In addition, there are a number of other companies likely to join the deal such as Oracle, Triller Walmart and the American investor group of TikTok.
However, the New York Times said the new move by China could make partners who want to buy TikTok, mostly operating in the country, feel anxious.
“Simply put, China is making it clear that they have a say in the deal, not just watch. It could be an attempt to stop the deal, help raise prices, or put in terms of terms. to benefit China in the future, “said Scott Kennedy, a China economic researcher at the Center for International Strategic Studies in Washington.
Mr. Kennedy also said that this is the rare time that the US and China have agreed on a view: TikTok is a concern for national security.
“Like every regulation from China, it will take time to fully understand its implications and whether the new regulation will be understood for specific transactions,” said Ross Darrell Feingold, the law. Political risk professor and analyst for multinational companies told the Nikkei Asian Review.
“Taking action early, and possibly banning the export of artificial intelligence technology, will help China avoid the same circumstances as TikTok in the future,” added Feingold.
Source: News York Times, Nikkei Asian Review,