World Views | ByteDance is playing chicken with Trump on TikTok – Macau Daily Times

There havebeen enough leaks over the past few days to get a sense of what the TikTok-Oracle Corp. deal looks like. The details are revelatory, with two aspects in particularworthy of note.First, TikTok parentByteDance Ltd. would maintain majority ownership, leaving Oracle and other American partners collectively in a minority, Nick Wadhams and Shelly Banjo of Bloomberg News reported this week, citing people familiar with the matter. Secondly, Oracle would have full access to TikToks codebase, according to the report.In summary, Oracle would get the keys to the castle but ByteDance would still own the kingdom.Theres an important caveat: the White House and the Committee on Foreign Investment in the U.S. havent signed off on the deal. President Trump said hell get a briefing today [Macau time], and isnt yet prepared to approve it.According to the Wall Street Journal, Trump administration officials remain committed to having TikTokunder U.S. control.ByteDances determination to hold onto majority ownership seems jarring. Despite being a global phenomenon, TikToks worldwide revenue last year accounted for about2% of ByteDances total sales. The Beijing-based company has plenty more products in its suite, including a domesticversion of TikTok called Douyin and news aggregator Toutiao. It would be a small financial sacrifice to let go of TikTok if that means keeping the business alive and operating in the U.S.I have no doubt Beijing has made its views on a majority sale clear to ByteDance management. After all, the Chinese government wouldprefer to see TikTok shut down than forced into American hands, according to a Reuters report.Yet the second aspect of the deal, as it stands now, is also revealing. Giving Oracle fullaccess to TikToks codebase indicates ByteDance is confident itll be just fine if the Americans get to peek under the hood at the software that has made the app such a global sensation.Software and algorithms dont stand still. The TikTok of today is vastly different from the TikTok of a year ago, and the product wed see next year would be better again. If improvements get slowed, or even halted, under U.S. management then ByteDance probably wont sweat it because it has thousands of engineers tweaking and refining the algorithms at its other products. And since TikTok is only a small part of its business, a certain amount of stagnation wont kill the company.Of course, that may bea harsh assessment U.S. software engineers remain the best in the world and would probably do a good job of developing the product. But either way, ByteDance can afford not to care too much as long as it still controls the company and can determine key decisions, such as whether to go for an initial public offeringor make an acquisition. It would also remain in the drivers seat should a future U.S. administration reverse course.That seems to be the Chinese companys endgame. Signing over majority control has a finality that the Chinese company hopes to avoid. Access to the codebase, on the other hand, can be reversed at anytime.ByteDance is playing chicken with President Trump. Lets see who flinches first. Tim Culpan, Bloomberg

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World Views | ByteDance is playing chicken with Trump on TikTok - Macau Daily Times