Ending Soon! Save 33% on All Access

ByteDance Would Rather Shut Down TikTok in the U.S. than Sell It: Report ByteDance broke its silence on the TikTok ban bill that Biden signed into law this week.

By Sherin Shibu

Key Takeaways

  • Sources who spoke with Reuters on Friday said that ByteDance would not sell its "secret source" of algorithms to competitors.
  • Insiders claim that shutting down TikTok in the U.S. wouldn't noticeably impact ByteDance's business.

Just after a bill that could potentially ban TikTok in the U.S. became law, the platform's Beijing-based parent company, ByteDance, publicly stated that it has no plans to sell.

The law, which President Biden signed on Wednesday, gives ByteDance nine months to sell TikTok to an American buyer, with a possible three-month extension in the case of a pending sale. If ByteDance does not comply, TikTok could be removed from app stores by January 19, 2025.

ByteDance made it clear on Thursday that if legal routes to fight the new legislation fail, it would rather shut down TikTok completely in the U.S. and remove the social media platform from app stores than sell it.

"Foreign media reports that ByteDance is exploring the sale of TikTok are untrue," ByteDance posted in a statement to Toutiao, a news aggregation app it owns. The post refutes a report by The Information that said the company was exploring options to sell, and ByteDance even attached screenshots of The Information's article in its rebuttal.

Shou Zi Chew, CEO of TikTok. Credit: Anna Moneymaker/Getty Images

"ByteDance doesn't have any plan to sell TikTok," the statement further read.

Related: The TikTok Ban Bill Has Been Signed — Here's How Long ByteDance Has to Sell, and Why TikTok Is Preparing for a Legal Battle

Four sources who spoke with Reuters on Friday said that TikTok's algorithms are foundational to ByteDance's business and that ByteDance would not sell its "secret source" of algorithms to competitors.

Disentangling the algorithms from TikTok's U.S. assets before a possible sale would be extremely difficult and unlikely to happen, according to the sources.

ByteDance does not publicly reveal details of its overall financial performance, nor disclose how units within it like TikTok are doing financially, but sources close to the company told Reuters that ByteDance's annual revenue rose from $80 billion in 2022 to $120 billion last year.

Though the U.S. contributed to a quarter of TikTok's overall revenue in 2023, TikTokers in the States only made up 5% of ByteDance's daily active users worldwide, per the same sources.

Those insiders claim that shutting down TikTok in the U.S. wouldn't noticeably impact ByteDance's business.

Related: Kevin O'Leary Wants to Buy TikTok — But Says It's Worth Much Less Than Last Year's Valuation

The TikTok ban bill passed due to national security concerns, which TikTok has long denied.

TikTok's execs are turning first to the U.S. legal system to circumvent a possible ban, calling the law "unconstitutional."

@tiktok

Response to TikTok Ban Bill

♬ original sound - TikTok

"The facts and the Constitution are on our side and we expect to prevail again," TikTok CEO Shou Chew stated Thursday in a TikTok.

"Our community is also filled with seven million business owners who have built their livelihoods on TikTok," he added.

Sherin Shibu

Entrepreneur Staff

News Reporter

Sherin Shibu is a business news reporter at Entrepreneur.com. She previously worked for PCMag, Business Insider, The Messenger, and ZDNET as a reporter and copyeditor. Her areas of coverage encompass tech, business, strategy, finance, and even space. She is a Columbia University graduate.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

'Creators Left So Much Money on the Table': Kickstarter's CEO Reveals the Story Behind the Company's Biggest Changes in 15 Years

In an interview with Entrepreneur, Kickstarter CEO Everette Taylor explains the decision-making behind the changes, how he approaches leading Kickstarter, and his advice for future CEOs.

Business Ideas

87 Service Business Ideas to Start Today

Get started in this growing industry, with options that range from IT consulting to childcare.

Business Models

How to Become an AI-Centric Business (and Why It's Crucial for Long-Term Success)

Learn the essential steps to integrate AI at the core of your operations and stay competitive in an ever-evolving landscape.

Marketing

5 Steps to Preparing an Engaging Industry Presentation

You can make a great impression and generate interest with an exciting, informative presentation. Find out my five secrets to creating an industry presentation guaranteed to wow.