InvestorQ : Why is the US so keen to put curbs on Tik Tok from operating in the US?
vaishnavi mhatre made post

Why is the US so keen to put curbs on Tik Tok from operating in the US?

vidhya Laxmi answered.
3 years ago

For most of the world, Tik Tok may be a business issue but for Donald Trump the Tik Tok issue is a manifestation of his battle with China. With US elections coming, Trump wants to show one trophy of his fight. There really cannot be a better trophy than Tik Tok.

The US wants China to give up the US business of Tik Tok on security grounds. That is asking a lot from a nation that created the ecosystem to build the company. Tik Tok is evaluating signing a long term deal with Oracle and operating in the US without Chinese ownership.

For Donald Trump, Tik Tok represents what China has managed to do better in the global start-up eco-system. If you look at India, players like Ant and Tencent have a much bigger and deeper stake in the Indian start-up ecosystem than any of the US players.

Secondly, there is the reach of Tik Tok of 200 million registered users in the US. Trump sees that as a distinct threat. The US does not want China getting a larger US mindshare. That is the genesis of the entire Tik Tok issue, which has also transformed into a security issue.

The US companies would be happy to buy out Tik Tok, US, but China has other plans, notwithstanding the price of $30 billion offered. China just passed a new law barring transfer of software intellectual IPs and algorithms to non-Chinese acquirers without prior approval of the Chinese government.