Short video platform TikTok is considering splitting from its Chinese parent company ByteDance in an effort to address national security concerns in the United States and avoid a nationwide ban, sources familiar with the matter told Bloomberg News.
According to the report, the potential split could be achieved through an initial public offering or a sale, but the company regards it as a final option and will only pursue it if its current proposal with the national security officials in the U.S. doesn’t get approved.
The Committee on Foreign Investment in the United States (CFIUS) has been conducting a national security review into TikTok for a while, and the company last year agreed to implement various measures as part of its proposed agreement called ‘’Project Texas’’.
However, the report states that officials from the Justice Department who are part of CFIUS are reluctant to give an approval to TikTok’s proposal, and that TikTok is not sure if its plans will be enough to maintain its operations in the U.S. due to CFIUS stalling the process.
TikTok’s negotiations with CFIUS have been going around for over two years now. Back in 2020, CFIUS unanimously suggested that ByteDance divest the short-video company due to concerns that the Chinese government could access citizens’ personal data.
The news follows a U.S. ban on TikTok on government-issued devices, and a new Senate bill, which received support from the White House, that could allow a nationwide ban on the app and other foreign technologies if they are found to be posing risks to national security.
Meanwhile, the U.S. is not the only country where TikTok is facing legal challenges. Citing similar concerns, Canada and the European Commission also recently banned the app from being used on government-issued devices.
Following the bans, TikTok introduced its new initiative called the ‘’Project Clover’’ last week, and announced plans to open three new data centers in Ireland and Norway as part of it.