TikTok: China’s loss is Texas’ gain
By: Ari Sharma
Tags: Tik Tok, Technology, China, Texas

TikTok new headquarters could be in Texas (Souce: Reuters)

JEC AUSTIN — Texas is being dubbed Silicon Hills, the next Silicon Valley of the country, and there is a good reason for it. Apple’s announcement in 2019, about the construction of a new campus that would be building all-new MacPros, was followed by the high profile announcement of Tesla’s Cybertruck factory in Austin in 2020. This spate of tech good news for Texas has been followed by another good turn in fortune.

TikTok’s Global Reach

Most users of online services today have heard of the Chinese video-sharing social networking app called TikTok. Known in China as Douyin, it is owned by a company called ByteDance and can be used to create short videos of 3 to 15 seconds that can include music, lip-syncing, and dancing. While most popular with the Gen Z crowd, the app has expanded its reach to other age groups and has gained popularity in the U.S.

TikTok Under Scrutiny

Its rising fame and Chinese ownership made President Trump and the U.S. regulators take notice of it. It was considered a national security threat by the Trump administration as they believed that TikTok could share data about its American users with the Chinese government. TikTok continued its negotiations with the U.S.government and Josh Gartner, a TikTok spokesman for TikTok operations in the US said, “Even though we strongly disagree with the administration’s concerns, for nearly a year we have sought to engage in good faith to provide a constructive solution” (Isaac et al. 3). TikTok was displeased about government interference in private business and even though it cooperated with the Trump administration for a while, it became increasingly critical. Trump issued an executive order on August 6, 2020 that took effect on September 20, 2020, banning any transactions within the app. On August 6, 2020, another executive order was issued that made ByteDance, TikTok’s parent company, divest their U.S. assets and surrender data gathered from users in the U.S. within 90 days.

US Contenders for TikTok sale

This left TikTok with no choice but to seek a sale of its U.S. operations to an American company. With over 100 million regular users in the U.S., there were quite a few contenders, with Microsoft and Oracle emerging as the frontrunners. With some confusion surrounding it, a deal was reached in September where Oracle and Walmart would have a combined 20% stake in a new company called TikTok Global with headquarters in the United States. Even though it is called TikTok Global, the main users are from the US and data will only be collected from US members by TikTok Global. Of the five board members for the company, four would be American. Oracle executive vice president Ken Glueck said, “Americans will be the majority and ByteDance will have no ownership in TikTok Global” (Horowitz 12).

As soon as President Trump gave his blessing to the deal, Texas Governor Greg Abbott tweeted that he had talked to the president about housing the new TikTok headquarters in Texas. In fact, President Trump said shortly after that “all the technology will be housed here. They are probably going to move to the great state of Texas” (Rozenzweig-Zwiff 2). Oracle has deep roots in Texas and a sprawling campus on the south shore of Lady Bird Lake(Austin, TX).

If the deal goes as planned, the addition of TikTok headquarters to Texas would be a huge win for the Lone Star State. With a booming economy and other tech ventures that have set up shop in Texas, the demographic and economic landscape of the state is set to change.

Sources:

https://www.apple.com/newsroom/2019/11/apple-expands-in-austin/

https://www.cnn.com/2020/09/21/tech/tiktok-oracle-walmart-explained/index.html

https://www.theverge.com/2020/7/22/21334860/tesla-cybertruck-factory-austin-texas-location-model-y

https://www.texastribune.org/2020/09/22/tiktok-texas-trump/

https://www.statesman.com/business/20200919/trump-says-he-approves-tiktok-deal-with-possible-texas-headquarters

https://economictimes.indiatimes.com/news/international/business/tiktok-to-challenge-trumps-crackdown-in-court-amid-rising-dispute/articleshow/77699743.cms