ByteDance is willing to ditch TikTok in the US instead of selling it off

What you need to know

• ByteDance, TikTok's parent company, would reportedly prefer shutting down TikTok in the US over selling it to an American firm if it can't beat a proposed ban in court.
• ByteDance is exploring legal options in the US but might pull the plug on TikTok in the US if legal efforts fail.
• Selling TikTok would be tough for ByteDance because its special algorithms, which are crucial to TikTok's success, are a significant part of its business.

ByteDance, TikTok's parent company, would rather shut TikTok down in the US than sell it off to an American firm if it can't win against a proposed ban in court, Reuters reported.

According to the news outlet, which cites four unnamed sources, ByteDance is looking into its legal moves in the US. But if those efforts don't work out, the parent company would reportedly pull the plug on TikTok in the US market.

Selling TikTok wouldn't be easy for ByteDance. The secret sauce that makes TikTok so addictive—its special algorithms—is a big part of its whole business, as per the report. Those algorithms are like the crown jewels of ByteDance's tech stash.

The sources added that even though TikTok is popular, it doesn't bring in a ton of money for ByteDance. So, shutting it down wouldn't hurt its business that much. Plus, the company would keep a grip on TikTok's algorithms.

If TikTok bites the dust in the US, about 170 million users would have to scramble for other alternatives.

The report is in contrast to a report from The Information a few days ago that claimed ByteDance was considering the idea of selling most of TikTok's US business. According to the report, ByteDance wanted to sell to a company outside the tech world and hold onto its video-recommending algorithm. But ByteDance has since denied the report.

Last week, ByteDance dug in its heels, announcing that it's not about to hand over TikTok to a US company or give up any part of the platform. This even after President Joe Biden signed a law that could boot TikTok out of the US.

The new law gives ByteDance until January 19, 2025 (with a possible extension) to either sell TikTok in the US or shut it down. US officials are worried that China might be snooping on Americans through TikTok, collecting all sorts of data.

TikTok's CEO, Shou Zi Chew, has said he's sure the company will come out on top in court.

"We are confident and we will keep fighting for your rights in the courts," he said. "The facts and the Constitution are on our side and we expect to prevail."