Three new major investors, including two US groups, signed a deal with popular video app TikTok on Thursday. According to the New York TimesThe app’s Chinese parent company ByteDance holds a minority stake, The impact this could have for the millions of creators and fans of this hugely popular short video app could be huge, However, at the moment, there is little information about future changes to the application,
The investor group includes US and international investors, including technology giant Oracle, California-based private equity fund Silver Lake and Emirati investment firm MGX. The joint venture will be managed by a new seven-member board of directors, the majority of whom are Americans.
The change was made in an effort to comply with federal law banning the app in China without restricting its ownership. ByteDance’s deadline was January 23. President Donald Trump has repeatedly delayed the ban.
The US government has long expressed concerns that the Chinese government could access data through TikTok’s parent company. In 2023, TikTok CEO Xu Chu said: “TikTok has never shared US user data with the Chinese government, nor has it ever been asked to do so. Even if there were such a request, TikTok would not comply.”
with note taken from media “The US joint venture will be responsible for US data security, algorithm security, content moderation and software security. It will also have exclusive rights and authority to provide security guarantees for content, software and user data in the US,” Zhu told staff this week.
TikTok is estimated to have more than 170 million users in the US and millions of content creators, some of whom make a living by creating videos on the app.
Collapse with algorithm?
One of these creators is the famous Jacob Bowles. “Roll Sandwich” VideoIn Dungeons & Dragons style, you roll dice to decide what type of sandwich you want to make. His videos are regularly watched by millions of people on TikTok, YouTube, Instagram and other platforms.
Mr. Bowles said he was nervous because he didn’t know whether TikTok, his biggest platform, would be banned in the United States. The app’s fate seemed more secure, but concerns remained over the brand’s controlling stake in the US.
When TikTok was banned in the US, Powell decided to share his videos on other platforms.
“We have made a conscious effort to diversify our revenues across multiple platforms to ensure we are not overly dependent on the revenue streams of any one platform,” he said. “After the change in ownership of TikTok, there is no guarantee that everything will remain the same. But if something like the TikTok Creator Program gets shut down, it will be a big blow to my income and livelihood, but it will not be the end of my career.”
American consumers will have to adapt.
TikTok’s algorithm will certainly change that for American consumers, said Kelsey Chickering, senior analyst at global research and consulting firm Forrester.
“The biggest question in this deal has always been whether sales used an algorithm, and the answer is yes and no.” Chickering said in a statement:“This US joint venture will have to retrain its recommendation algorithms based on data from US users, which means the experience will be different and users will likely notice,”
Simply put, algorithms are a way to predict what type of content consumers are most likely to enjoy. If you watch a lot of recipe videos on TikTok, the app can recommend more recipe videos for you. TikTok and other content platforms are looking to use machine learning to analyze what content users like, show them more content, and keep users on the app as long as possible.
Chickering said US investors joining the US version of TikTok would change the data the app analysed.
“The algorithm is at the heart of TikTok’s immersive experience, and the jury will be out on whether TikTok can recreate the magic of the original experience, only in the US,” he said. Otherwise, creators and consumers can stream short YouTube videos and Instagram Reels.
