SEOUL: ByteDance, the tech giant known for creating TikTok, began in a Beijing apartment 12 years ago and has since become one of the most valuable companies globally. ByteDance is worth around US$225bil (RM1.05 trillion) according to CP Insights, surpassing companies like SpaceX and OpenAI.
ByteDance introduced TikTok in 2017, which quickly gained popularity with over a billion users in four years. The app is an international version of Douyin, launched in China in 2016, with hundreds of millions of users. The success of these apps has allowed ByteDance to expand into areas like ecommerce and travel bookings, in addition to releasing a video editing app.
With over 150,000 employees in nearly 120 cities worldwide, ByteDance is a privately held company that does not disclose its revenue. However, estimates place its earnings on par with some of the largest firms globally. In 2023, ByteDance’s sales surpassed US$110bil (RM515.68bil), per Bloomberg, exceeding Tencent’s estimated revenues that year.
ByteDance did not provide information on its revenue or the amount it earns from TikTok when asked by AFP. Both TikTok and Facebook Meta pay over 100 fact-checking organizations, including AFP, to verify videos for potential false information.
Who owns ByteDance?
TikTok has stated that about 60% of ByteDance is owned by institutional investors like BlackRock, while the founders hold a 20% stake and the rest is with employees. ByteDance is incorporated in the Cayman Islands and counts General Atlantic among its investors. Three of the five board members are Americans.
A Chinese state-owned entity owns 1% of Douyin, a requirement under Chinese law, according to ByteDance. This stake also includes a board seat at ByteDance’s Chinese entity. During a US congressional hearing, TikTok CEO Shou Zi Chew mentioned the presence of a Chinese official on ByteDance’s board while asserting TikTok’s independence from government manipulation.
Why is ByteDance a concern for the United States?
Many US lawmakers believe that TikTok, as part of ByteDance, is not independent from Beijing despite its headquarters being outside China. The app has been a diplomatic issue between the US and China, with past efforts to ban it. A bill in Congress now seeks to compel the company to disconnect from ByteDance or face a US ban.
Concerns include fears that ByteDance, being a Chinese entity, could share data on over 170 million American users with the Chinese government for various purposes. US intelligence agencies and regulators, along with the FBI director, have highlighted these risks. TikTok is already prohibited on government employees’ work phones in several countries over security concerns.
Responses from ByteDance and TikTok
Both companies assert that US user data is safe, denying any involvement with the Chinese government regarding data sharing. TikTok routes all US traffic through US infrastructure, deletes previously collected data, and ensures Douyin employees cannot access TikTok’s US user data.
If the legislation to sever ties with ByteDance passes, TikTok plans to challenge it in US courts. President Joe Biden will sign the bill if approved by Congress, but its prospects in the Senate face uncertainty due to opposition.
China’s stance
China has opposed any forced sale of TikTok and criticized targeting the app as bullying. Foreign ministry spokesperson Wang Wenbin highlighted the lack of evidence that TikTok poses a national security threat to the US. Beijing may need to approve any sale of TikTok, as indicated by established rules on technology exports for civilian use. – AFP
