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Three major new investors, including two US groups, signed agreements with popular video app TikTok on Thursday. According to the New York Times. The app’s Chinese parent company, ByteDance, maintains a minority stake. The ramifications could be huge for millions of creators and fans of the wildly popular short video app. But for now, any future changes to the app are mostly unknown.
The half-American and global group of investors includes technology giant Oracle, a California-based private equity fund called Silver Lake, and Emirati investment firm MGX. The joint venture will be managed by a new seven-member board of directors, with a majority of American members.
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The changes come as an attempt to comply with federal law that bans the app if it does not reduce its Chinese ownership. ByteDance was facing a January 23 deadline. President Donald Trump has repeatedly postponed the implementation of the ban.
For years, the US government has raised concerns about the Chinese government’s potential access to data through TikTok’s parent company. In 2023, TikTok CEO Shou Chew said, “TikTok has never engaged in or received a request to share US user data with the Chinese government. TikTok will not honor such a request if it is ever made.”
In a note The media got it This week, Chiu told employees that “the US joint venture will be responsible for US data protection, algorithm security, content moderation, and software assurance. It will also have the exclusive right and authority to provide assurances that US users’ content, software and data are safe.”
It is estimated that TikTok has more than 170 million US users, as well as millions of creators, some of whom make a living by creating videos on the app.
Roll for the algorithm?
One such creator is Jacob Bowles, who is very popular “Roll for sandwich” videoswhere he rolls dice Dungeons & Dragons-style to determine what type of sandwich he will make. Millions of people regularly watch his videos on TikTok, YouTube, Instagram and other platforms.
Pauwels said it was “stressful” not knowing whether TikTok — his largest platform — would be banned in the United States. Now that the app’s fate is a bit more secure, he said he still has concerns about majority American ownership of the trademark.
“I’m concerned about the potential issues that could arise in terms of oversight,” Bowles told CNET. “A lot of the digital privacy concerns that have been cited as reasons for the TikTok ban and forced sale of the platform could certainly be applied to US companies like Meta, so I feel like there were definitely some other motivations driving those who wanted to shut down or transfer ownership of the platform.”
When it seemed likely that TikTok would be banned in the United States, Pauwels made the decision to share his videos on other platforms.
“I have made a conscious effort to diversify my earnings across multiple platforms to ensure I am not overly reliant on the income stream from any particular platform,” he said. “As ownership of TikTok changes, there is no guarantee things will remain the same status quo, but even if something like the TikTok Creator Program disappeared, although it would be a huge hit to my income and livelihood, it would not be the end of my career.”
US consumers will have to adapt
TikTok’s algorithm will certainly change for American consumers, said Kelsey Chickering, principal analyst at global research and consulting firm Forrester.
“One of the most important questions in this deal has always been whether an algorithm will come with the sale, and the answer is yes and no.” Chickering said in a statement. “This US joint project will have to retrain the recommendation algorithm on US user data – which means the experience will feel different, and users are very likely to notice.”
Simply put, an algorithm is a way to predict what type of content consumers will enjoy. If you’ve watched a number of TikTok recipe videos, the app will likely recommend more of them to you. TikTok and other content platforms use machine learning to analyze the content you like and then show you more of it, with the goal of keeping you engaged with the app for as long as possible.
With American investors involved in the American version of TikTok, Chickering said the data the app analyzes will be different.
“Although the algorithm may be the same as in the US version, the data inputs are not,” Chickering told CNET. “If the US joint venture trained this US algorithm on US data only, and not global data, the content mix would naturally change. Users might find their feeds to be less culturally driven and far less globally minded.”
“The algorithm is the beating heart of the addictive TikTok experience, and the jury is still out on whether a US-only TikTok will replicate the magic of the original experience,” she said. “If not, creators and consumers may flock to YouTube Shorts and Instagram Reels.”