But decoupling from China is not be easy for TikTok:
* On Sunday, a British publication said TikTok has halted its talks with the British government over possibly moving its headquarters to London. The publication reports that Bytedance had been in talks with the UK’s Department for International Trade and with Prime Minister Boris Johnson’s office for several months to set up a 3,000-employee strong London base.
* But Britain’s recent decision to freeze out Huawei from its 5G network has derailed the talks, the report said. Beijing has warned of retaliatory measures against the UK following the Huawei decision.
* Earlier, a US daily had reported that TikTok was considering a headquarters outside China. The report suggested the presence of US investors such as Coatue Management and Sequoia Capital in Bytedance as possible factors.
* Also note: TikTok recently hired former Disney executive Kevin Mayer as its new CEO. Mayer works out of Los Angeles.
* But reports also say any decision short of Bytedance selling TikTok to a non-Chinese company is unlikely to please the US administration. There is a recent precedent here. Last year, the US Committee on Foreign Investment had forced the sale of gay dating app Grindr, ruling its Chinese ownership posed a national security risk; it said this exposes US government employees to potential blackmail by the Chinese government.
* Selling TikTok, though, is not easy. No other product in Bytdance’s portfolio has had the kind of international success TikTok has had. Bytedance, valued at around $150 billion in the secondary market, is said to be considering an IPO, and a loss of its marquee product would markedly undervalue the company.
* Also, as Ben Thompson of Stratchery explains, TikTok’s trump card isn’t the platform itself, but the underlying artificial intelligence and recommendations that enable even a video by a novice to go viral. That’s AI smarts designed and owned by Bytedance — the company first deployed the algorithm successfully in its popular Chinese news platform, Toutiao.