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The popular video-sharing social media app TikTok has garnered headlines for much of 2020, but not for the reasons its founder, Zhang Yiming, would have liked.
The app, which in July 2020 had 800 million active users worldwide, has become embroiled in controversy and geopolitical tensions between the United States and China. TikTok has faced investigation and claims by American authorities, including President Donald Trump, alleging that the social media app is a threat to national security.
It was these claims that led Trump to sign an Executive Order in August forcing Zhang Yiming’s ByteDance to divest its US TikTok operations or face being banned in that country. ByteDance has already seen TikTok banned in India as a result of the border conflict with its Chinese neighbor.
Amid all of this, ByteDance chief executive officer and TikTok founder Zhang Yiming has had difficult decisions to make. Selling TikTok’s operations in the US to an American company would save the app from a threatened ban, but at the expense of Zhang appearing to cave to President Trump’s demands.
With a bid from Oracle Corporation having reportedly been accepted and awaiting the approval of Washington and Beijing, in an upset for Microsoft, it remains to be seen whether Zhang can satisfy the demands of two rival world powers.
Born in 1983, Zhang Yiming was educated at Nankai University, graduating in 2005 with a degree in software engineering.
Following graduation, Zhang worked for a number of technology companies and startups before eventually founding ByteDance, the parent company of TikTok, in 2012. It would be with ByteDance that Zhang would earn his fame and fortune.
Before TikTok, however, would come Jinri Toutiao. Founded in August 2012, Toutiao is a news aggregation app that is powered by ByteDance’s now-famous artificial intelligence software, the same software that has powered the success of TikTok’s “For You” page recommendations.
Zhang has explained that the app works by pushing information “not by queries,” but by “recommendations” made from the app’s fine-tuned artificial intelligence.
Toutiao’s formula was clearly successful. By 2014, the company had secured a daily active user count of more than 13 million and had raised hundreds of millions in funding from investors, including US$100 million from the American venture capital group Sequoia Capital.
In 2018, Toutiao’s valuation had reached US$75 billion, which made ByteDance the world’s most valuable startup, surpassing the likes of Uber and securing billions more in investment from global groups, including Masayoshi Son’s SoftBank.
In 2016, following on from Toutiao’s success, Zhang launched TikTok, the popular social media app that now finds itself at the center of global attention for all the wrong reasons.
It would be with TikTok that Zhang would find not only his success but also the current source of his tenuous position wedged between states, politicians and rival tech giants.
TikTok, launched under the name Douyin in China, became an instant hit in China. Within one year of the app’s release, it had already accrued 100 million users, with founder Zhang Yiming eyeing an even bigger global audience.
Zhang purchased Chinese-competitor Musical.ly for US$800 million in 2017 and merged the apps under the TikTok banner the following year. ByteDance’s Musical.ly purchase opened the door to further expansion, including in the US, and by September 2018, Zhang’s TikTok had more monthly installs than Facebook, Instagram, YouTube and Snapchat on the Apple App Store.
The joint success of Toutiao and TikTok, though especially the latter, has helped fuel Zhang’s own personal fortune. Amid the uncertainty over the app’s future, Zhang’s wealth still stands at some US$16.2 billion.
Zhang has closely embraced TikTok’s phenomenal success and has even said he made it “compulsory for all management team members to make their own TikTok videos” and win a certain number of “likes,” with the losers having to do pushups, according to the South China Morning Post.
Zhang has also spoken about increasing the international reach of his ventures and his hopes that ByteDance’s products would become “as borderless as Google.”
Yet its future and Zhang’s own remains clouded by more uncertainty than ever before.
When President Trump signed an Executive Order banning business with Zhang’s ByteDance in August 2020, forcing TikTok’s US operations to be sold or face a ban in that country, Zhang’s ByteDance joined a club of other Chinese companies whose future connections to American markets remain in peril.
As potential buyers, like Microsoft and Oracle, courted the Chinese company, questions arose over how to separate a US version of TikTok from the Chinese version as well as whether ByteDance’s closely-guarded artificial intelligence software would be included in any divestment deal.
Microsoft’s bid for TikTok was recently rejected and the contract for the US rights appears to have been awarded to Oracle.
The sale of TikTok was complicated on account of President Trump’s demands that the US Treasury Department receive compensation from any deal and that if no deal was made by September 15, the social media app would be banned.
Now, both Beijing and Washington must agree to ByteDance’s deal with Oracle, which may prove difficult given the opposing expectations both sides hold of Zhang.
Pressure on Zhang comes not just from President Trump, but also from his own country and ruling government, which appear intent on forcing him to avoid a sale that would allow TikTok’s operations in the US to continue. When Zhang posted on the Chinese social media site Weibo that he was considering selling to a US business to “ensure that TikTok can continue to serve American users,” some Chinese internet users branded the billionaire a traitor and American-apologist.
Zhang now faces pressure from China’s government, which recently updated its export rules to require that any sale of artificial intelligence technology receive a license from the Chinese government itself.
This is not the first time Zhang or his ventures have come under fire in China. In 2018, ByteDance’s app Neihan Duanzi was banned because of its “vulgar” content, with Zhang apologizing and stating that the app was “incommensurate with socialist core values.”
Zhang’s ByteDance has already said it will “strictly follow” the new rules, which seems irreconcilable with the reports that US tech company Oracle has been successful in its bid to acquire the American operations of TikTok.
Zhang Yiming faces the unenviable task of appeasing an US government intent on forcing a sale and a Chinese government and public that would rather see the billionaire resist this pressure.
Despite his own stated global vision for ByteDance’s products, Zhang appears damned no matter what course is taken. The gulf between all interested parties and their demands appears to be irreconcilable and TikTok’s reported sale or “restructuring" with Oracle must be agreed on by both Beijing and Washington.
For two sides that have so far agreed on little in this dispute, it seems unlikely that any agreement on the future of TikTok will be forthcoming.
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