An acquisition could equally endear Microsoft to Chinese President Xi Jinping. On Tuesday, the government-owned newspaper China Daily published an editorial condemning Trump’s “smash and grab” approach to TikTok, and vowing that China would retaliate against unilateral American action. Microsoft has maintained a foothold in China since 1992, earning it respect alongside local tech giants such as Tencent and Baidu. Even so, China still accounts for only 2 percent of Microsoft’s revenue. By helping to mediate the standoff, Microsoft could improve its fortunes in China. In either case, the American-policy dimensions of a TikTok divestiture would play second fiddle to the corporate benefits of a $1.6 trillion behemoth.
Finally, the artificial intelligence that makes TikTok great is also dangerous, no matter who’s got their hands on it. TikTok is like an iceberg. On the surface, users make and share short videos, which they can also spread via other social-media platforms. No big deal.
Then there’s the rest of the iceberg. ByteDance has created a colossal infrastructure to make the app so engaging. All social apps are designed for compulsion, but TikTok is particularly addictive because it dispenses with the setup that Facebook, Twitter, Instagram, and others require. There’s no need to find people to follow or to build a long pattern of use. Instead, you download it, watch a few videos, and TikTok starts recommending more: sour worms and liquor in a vat; Mr. Clean dancing across the carpet; a lip-synch of a cat’s fear of bath water. You don’t even need an account.
The recommendations are surprisingly effective. That’s because ByteDance has invested enormous time and money to develop artificial-intelligence software that scans posted videos for substance, form, and meaning, and uses that material to recommend more. For TikTok viewers, the resulting sensation is overwhelming, a bit like when Google first replaced AltaVista: magically good results.
But who will own these valuable AI systems if TikTok gets split up in a sale? The AI has potentially broad application in identifying and matching patterns of information to the people who would want it. A company like Microsoft could use this system in any number of ways, including in its enterprise products, such as email or LinkedIn. But it’s not yet clear if intellectual property such as TikTok’s AI will divest in a purchase, or if it will remain in ByteDance’s hands, or if both entities will share in it, or something else entirely. Microsoft has said only that it will “own and operate TikTok” in a few English-speaking markets.
The Trump White House hasn’t weighed in on this detail. Yesterday, Senator Josh Hawley, a Republican from Missouri, sent a letter to Microsoft posing numerous questions about the deal, but none considered how the company might share in the general software already imbricated with TikTok itself.