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TikTok building U.S.-only app with separate algorithm and data systems

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TikTok is developing a standalone U.S. version of its platform, complete with a distinct algorithm and data system, to comply with U.S. legislation that mandates the divestment of its American operations. The project, internally known as “M2,” aims to meet a September deadline and could clear the path for a potential sale of TikTok’s U.S. business, Reuters reports, citing employees with direct knowledge.

The move involves duplicating TikTok’s codebase — including AI models, algorithms, features, and U.S. user data — from its global app to an independent U.S.-specific version. It is TikTok’s most ambitious technical separation effort to date and would represent the deepest structural divide between ByteDance’s U.S. and international operations. The U.S.-only version would function much like Douyin, TikTok’s China-specific app, and would not be visible to users outside the U.S.

The initiative responds to the 2024 law requiring ByteDance to divest TikTok or face a ban, amid long-standing U.S. concerns about data privacy and national security. While content from the current app is expected to carry over, the new recommendation engine will be trained solely on U.S. user data. This is expected to shift content visibility toward American creators and possibly limit international reach for non-U.S. influencers.

Sources revealed that since January, TikTok has been removing non-U.S. user data from Oracle’s American data centers to comply with separation demands. Meanwhile, ByteDance has worked on splitting its algorithm’s codebase — a move it previously denied.

If the technical split is completed, U.S. operations would be managed independently of TikTok’s global team, although ByteDance engineers might remain involved on a limited basis. This has raised internal questions about whether the U.S. algorithm will retain its effectiveness without access to ByteDance’s global engineering expertise.

A potential sale would involve a joint venture including American investors such as Susquehanna International Group, General Atlantic, KKR, and possibly Oracle, along with new players like Blackstone and Andreessen Horowitz. ByteDance would retain a minority stake. However, Beijing’s approval remains uncertain due to China’s export restrictions on recommendation algorithms, a key concern in the stalled 2020 negotiations.

The separation effort is unfolding against a broader backdrop of U.S.-China trade tensions. While former President Donald Trump said last week he would resume discussions with China over the sale, he admitted uncertainty over Beijing’s cooperation, adding, “I think the deal is good for China and it’s good for us.”

Malaysia Denies Government Role in AI Project Involving Huawei Ascend Chips

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Malaysia’s Ministry of Investment, Trade and Industry (MITI) has officially clarified that the government is not involved in a reported artificial intelligence project using Huawei’s Ascend chips, distancing itself from earlier reports suggesting official backing.

The clarification follows local media coverage on Monday that claimed Malaysian firm Skyvast Corporation would deploy Huawei’s Ascend AI chips in a domestic initiative. In response, MITI stated the project “was not developed, endorsed, or coordinated by the Government of Malaysia, nor does it form part of any Government-to-Government agreement or nationally mandated technology programme.”

Huawei, for its part, told Reuters that it has not sold any Ascend chips in Malaysia, and that the Malaysian government has made no such purchases. The Chinese tech giant developed the Ascend line after being cut off from U.S. suppliers, positioning the chips as domestic alternatives amid Washington’s escalating export restrictions on advanced semiconductors, particularly from Nvidia.

The Malaysian ministry also reaffirmed its commitment to complying with international export control laws, national security regulations, and guidance from global regulatory bodies. The statement appears aimed at avoiding diplomatic friction amid growing U.S. scrutiny over AI-related tech flows involving China.

Skyvast Corporation has not responded to requests for comment.

The backtracking highlights the sensitivity of semiconductor and AI technology partnerships in the current geopolitical climate, especially as countries weigh alignment with U.S.-led technology sanctions while maintaining ties with Chinese tech firms.

China Slams U.S. for ‘Abusing’ Export Controls Over Huawei AI Chip Guidance

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China has sharply criticized the United States for what it called the “abuse of export control measures”, following new U.S. guidance warning companies against using Huawei’s Ascend AI chips. The Chinese Ministry of Commerce said the move threatens the stability of global semiconductor supply chains and vowed to take action to protect the rights of its domestic companies.

At a press conference on Thursday, Commerce Ministry spokesperson He Yongqian urged Washington to “correct its practices” and accused the U.S. of targeting Chinese tech firms unfairly.

Background:

  • On Tuesday, the U.S. Commerce Department’s Bureau of Industry and Security (BIS) issued new guidance stating that companies using Huawei’s Ascend chips—the firm’s most advanced AI semiconductors—risk violating U.S. export controls.

  • These chips are produced by Huawei, a Shenzhen-based tech giant already subject to sweeping U.S. restrictions, and are seen as direct competitors to products from American chipmakers like Nvidia in the Chinese AI market.

China’s Reaction:

The Chinese government views the BIS warning as a deliberate attempt to suppress China’s tech advancement and influence in artificial intelligence. The Ministry emphasized that it will take “necessary measures” to safeguard the legitimate interests of Chinese enterprises.

The dispute underscores growing U.S.–China tensions over semiconductor technology and AI dominance, with Washington seeking to restrict China’s access to critical hardware and Beijing accusing the U.S. of weaponizing trade rules to stifle competition.

This development also comes as the global tech industry becomes increasingly fragmented, with countries pursuing “chip sovereignty” strategies to reduce reliance on foreign suppliers.