TikTok has 1.5-billion monthly active users on a global basis and about 150 million in the U.S. Last month President Joe Biden signed the Protecting Americans from Foreign Adversary Controlled Applications Act. This started the clock running for the Beijing-based owner of the app, ByteDance, to find a buyer for its U.S. operations that would not be in violation of the act. ByteDance has stated that it would rather shut it down in the U.S. than be forced to sell; it wants to keep its algorithm to itself.
While it may seem understandable that ByteDance would do that given how many users it has around the world—absent the American users it would still have 1.35 billion—there is a factor that shouldn’t be overlooked, which is the fact that according to the International Monetary Fund, which knows things like this, the U.S. is the number-one country in the world in terms of GDP. It is at $28,783 billion. China is second, at $18,536 billion.
The GDPs of the other eight countries constituting the top 10 (Germany, Japan, India, U.K., France, Brazil, Italy, and Canada) combined equals $26,325 billion, less than the U.S.’s.
Why is this important? Well, for one thing it goes to the point that U.S. consumers on average have a lot of disposable income compared with other people in the world, even those that are living in developed economies like the aforementioned countries.
This means that U.S. consumers have more money that those elsewhere for discretionary purchases, like things that are exhibited on TikTok. So having access to the 150 million U.S. users on the platform is simply more remunerative for commercial enterprises than millions elsewhere.
At the end of January Universal Music Group began pulling its music from TikTok in a dispute based on royalties for the artists and the use of AI Although the U.S. is generally thought as being ahead of China with regard to AI, Xi Jinping has stated that there is a goal to be number one in AI by 2030, so UMG’s concern about ByteDance and AI with regard to the artists on its roster—hundreds, ranging from Anitta to ZZ Top—is reasonable.
As of May 1, all is forgiven, all is sweetness and light.