TikTok is considering spinning off ByteDance
Photo: ANP
The board of directors of popular video app TikTok is considering parting ways with Chinese parent company ByteDance, Bloomberg News reports based on sources within the company. TikTok may see this as a move to assuage US concerns about national security threats.
TikTok is under national security review by the Committee on Foreign Investment (Cfius) in the United States. This committee is looking into a number of measures that TikTok wants to take to allay concerns within the United States about national security. Dubbed Project Texas, that plan involves recruiting US technology company Oracle to manage user data in the US and appointing a US-approved board of trustees.
If Cfius doesn’t approve of Project Texas, TikTok may consider spinning off ByteDance. Such a move could lead to a sale or an IPO. And according to Bloomberg, the Chinese government would have to agree to such a deal.
TikTok CEO Shou Chew has been asked to testify before a House committee next week about, among other things, the app’s privacy policy with regard to user data. The company’s relationship with the Chinese Communist Party will also be discussed.
Bloomberg News also reported that Abu Dhabi-based artificial intelligence company G42 has taken on more than $100 million (about €93 million) in ByteDance. The unlisted Chinese owner of TikTok is thus valued at $220 billion.
Sheikh Tahnoun bin Zayed Al Nahyan oversees Group 42 and is the National Security Adviser to the United Arab Emirates. G42 bought the stake in recent months from existing investors through the investment fund 42XFund.
ByteDance’s valuation of $220 billion is significantly lower than the $300 billion valuation it gave the company last year. In 2021, the company will be valued between $300 billion and $400 billion.
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