Any agreement to purchase a short video sharing platform that PitchBook records was valued at $220 billion in 2023will likely eliminate TikTok's user-preference-based algorithms that have helped make it so successful, said the CEO of O'Leary Ventures.
O'Leary, however, believes it is unlikely that the Chinese government will sell the algorithms – “so you get the valuable domestic brand of TikTok and 170 million users without any data,” he said.
Potential buyer will have to “re-emulate” these algorithms using US code and act as a “governor” to transform the platform from “TikTok China” to “TikTok USA”. This is where the drastic reduction in valuation comes from.
“This is the most complex transaction in the history of social media and will require the creation of a new algorithm,” O'Leary said.
The bill will force the owner of TikTok to sell
In early March, the U.S. House of Representatives voted for a bill that will force TikTok owner ByteDance to get rid of its flagship app. If it does not do this, it will probably be excluded from the US market. However, it could be several months before any TikTok-related legislation reaches the Senate.
CNBC also reported that it is unclear whether the Chinese government will allow ByteDance to sell TikTok to a US buyer. The company lobbied fiercely against this bill.
Still, O'Leary said the risk of a ban and forced sale of the social media giant early next year is at least 50% after the US presidential election. and prepares for this possibility.
