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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.”

US Considers Potential Rules to Restrict or Bar Chinese Drones

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The U.S. Commerce Department is exploring new rules that could restrict or ban Chinese-made drones in the United States, citing national security concerns. The department announced on Thursday that it is considering measures to safeguard the U.S. drone supply chain, emphasizing that threats from China and Russia could allow adversaries to remotely access and manipulate these devices, thereby compromising sensitive U.S. data.

China dominates the U.S. commercial drone market, accounting for the majority of sales. In response to these national security concerns, the Commerce Department is seeking public comments on potential rules, with a deadline set for March 4. The proposed regulations could mirror those applied to Chinese vehicles, which may face similar restrictions or bans due to concerns over foreign-made equipment, chips, and software embedded in drones.

Commerce Secretary Gina Raimondo previously indicated that the department could impose restrictions akin to those that would effectively bar Chinese vehicles from U.S. markets. The focus would primarily be on drones containing Chinese or Russian-made components. Raimondo hopes to finalize the regulations on Chinese vehicles by January 20, coinciding with the inauguration of President-elect Donald Trump.

This move follows a series of actions taken by the U.S. government over the past year to address concerns about Chinese drones. Last month, President Joe Biden signed a law that could result in a ban on new models from China-based DJI and Autel Robotics, two of the largest drone manufacturers. Under this law, a U.S. agency must assess whether drones from these companies pose national security risks within a year. If no decision is made, DJI and Autel could be prevented from launching new products in the U.S.

DJI, the world’s largest drone maker, which accounts for more than half of all commercial drones sold in the U.S., has responded by warning that an inability to launch new products would hurt its business. The company has also taken legal action, suing the U.S. Department of Defense for designating it as a company with ties to China’s military. DJI denies these claims and has asserted that its products do not involve forced labor, despite Customs and Border Protection halting some of its drone imports under the Uyghur Forced Labor Prevention Act.

U.S. lawmakers have repeatedly expressed concerns about the potential risks posed by Chinese-made drones, citing data transmission vulnerabilities and surveillance issues. In 2019, Congress passed a law banning the Pentagon from using drones or components manufactured in China.