On July 9, Reuters reported, citing anonymous sources, that TikTok is working on a standalone app for US users built on a distinct algorithm and data infrastructure separate from its global platform. Earlier, The Information also reported that TikTok was developing a new version of its app as part of potential divestment discussions for its US operations. In response, TikTok posted a brief statement on its US website denying the reports, saying, “The recently posted Reuters story, which is based on anonymous uninformed sources, is factually inaccurate.”
Why it matters: The move could pave the way for settling long-running debates over whether the company would hand over its prized asset – the recommendation algorithm behind the ByteDance-owned short video platform, which has been a key flashpoint in the US-China tech tensions.
Details: According to Reuters’ anonymous source, ByteDance employees have been working under tight deadlines to build a new US-specific version of the app by transferring and replicating the codebase – including AI models, algorithms, features, and user data – from the global platform. However, any effort by TikTok to divest or spin off its US operations would still require Chinese regulatory approval due to export controls on certain AI and data technologies. This means the fate of a potential sale, and TikTok’s future in the US market, hinges not just on Washington, but also on Beijing.
Context: In August 2020, China’s Ministry of Commerce and Ministry of Science and Technology updated the country’s Catalogue of Technologies Prohibited and Restricted from Export. The revised list added “personalized information push services based on data analysis” and “AI interactive interface technology,” effectively putting TikTok’s core algorithm under export controls.
- As a result, Chinese companies looking to transfer such restricted technologies abroad – whether through trade, investment, or other means – must first seek approval from provincial-level commerce authorities before going ahead with substantive negotiations or signing contracts.
- This regulatory backdrop underscores why any TikTok deal involving the sale of its algorithm or control of its US business would need formal clearance from Beijing. Meanwhile, the clock is ticking: under a June 19 executive order signed by former US President Donald Trump, the next deadline for TikTok to divest its US operations or face a ban is set for September 17. To date, Trump has signed three such orders, repeatedly extending the timeline for TikTok to finalize a transaction.
Trump has continued to publicly weigh in on the issue. On June 29, in an interview with Fox News, he said he had lined up “a group of very wealthy people” to acquire TikTok’s US business and expected to reveal details by around July 13, adding that he believed China would likely approve the deal. Days later, on July 4 aboard Air Force One, Trump told reporters the US was “close to an agreement” and would start talks with China as early as July 7 or 8.
When asked about this at a regular press briefing on July 7, Chinese Foreign Ministry spokesperson Mao Ning reiterated Beijing’s longstanding position: that business operations and acquisitions should not only follow market principles and be independently decided by companies, but also comply with Chinese laws and regulations. In January, after TikTok briefly went offline in the US before resuming service, Mao similarly stressed that deals involving Chinese firms must align with domestic legal frameworks.
