I wrote this in the Tuesday newsletter https://sinocism.com/p/xi-chairs-symposium-with-entrepreneurs about TikTok. Is there any way Bytedance and investors can restructure TikTok to satisfy the US government?

The Information is just out with a story that ByteDance Investors Discuss TikTok Purchase:

A small group of ByteDance’s U.S. investors is discussing with the company’s top management the possibility of joining forces to buy a majority stake in TikTok, said people familiar with the situation, as it grows more difficult for the Chinese-owned company to keep control of the fast-growing video app.

The talks appear to be preliminary, and the idea is just one possible scenario ByteDance is examining as it explores ways of dealing with a possible U.S. ban or forced divestiture of the app, the people said. U.S. government pressure on ByteDance is growing steadily: On Wednesday, the House of Representatives voted to bar all federal employees from loading TikTok onto their government-issued phones. ByteDance founder and CEO Zhang Yiming is open to a sale if that’s what is best for the future of the app, The Information previously reported.

I wrote on July 7 about the increasing possibility that the US would block the app:

Perhaps the best route for TikTok is to find a buyer before even more value is destroyed. Such a buyer would have to be one that is palatable to the US government, big enough to buy the entire company and then make the investment to truly separate the entire company from any PRC entanglements, but also able to avoid possible antitrust issues. It is a short list.

But simply changing ownership will likely not be enough. All the data and code, including the content recommendation algorithms, will have to be moved out of China and be made inaccessible to anyone in the PRC, what I meant by “any PRC entanglements”. Is that even possible? I do not know, but simply shuffling around share certificates without addressing the core concerns of the US government is unlikely to persuade US policymakers.