Divestment in this context means that ByteDance, the Chinese parent company of TikTok, must sell its U.S. operations to a company or investors that are not under Chinese control. This requirement comes from the U.S. government’s concerns over national security and data privacy, fearing that the Chinese government could access American user data through TikTok.
How Could ByteDance Divest TikTok?
- Sell to a U.S. based Company: A major American tech company like Microsoft, Oracle, or Google could purchase TikTok’s U.S. operations.
- Sell to a Consortium of Investors: A group of U.S. or Western investors could buy TikTok and operate it independently.
- Spin Off into a Separate Company: TikTok U.S. could be separated from ByteDance and turned into a stand-alone company with new ownership and management.
- Partner with a U.S. Firm: ByteDance might maintain a minority stake while a U.S. company or group takes majority ownership. Read more about the TikTok ban and the rush to Xiaohongshu (RedNote): A New Era in Social Media Migration..
ByteDance is resisting the forced sale, arguing that TikTok is not a security threat and that such an order is unconstitutional. Meanwhile, potential buyers, including some major investors, are evaluating their options. The 75-day extension from President Trump gives them more time to negotiate a deal.