Got to love America. One day El Pres Trump says ‘TikTok times up’ citing that it is nothing more than a tool of the Chinese Communist Party to spy on US Citizens. The next he is ‘blessing’ a potential deal with Oracle and perhaps Walmart to let it stay.
Regardless he achieved two things with the TikTok times up declaration.
Enormous publicity for the dark side of this Chinese data-harvesting app
Forcing the Chinese company to do business on US terms if it wants to remain in the US.
You can read the ‘TikTok times up’ back story here but let me summarise.
TikTok is a platform for users to create and post 15-second video/audio clips. There are about 2 billion users worldwide and 100 million in the US.
TikTok then promotes these clips to users it selects (no you can’t find a menu to browse).
It uses AI that is so secret/strategic to the Chinese government that the deal to sell TikTok to Microsoft could never happen.
It is a hastily written app based on Chinese company ByteDance’s Chinese/Hong Kong version Douyin. This app supplies, by law, enormous amounts of data to the Chinese Communist Party (CCP) based on whatever it wants to know. That is the same for any Chinese-developed app.
Douyin requires photo/state ID to set up and account. You get more CCP social credits’ for having the location tracking app on your smartphone.
Experts say it is cobbled together around secret state-developed AI engine. It has advanced facial and object recognition, speech to text (to search for keywords), sentiment analysis and so much more. It overlays this with location, user registration details and much more.
That much more comes from third parties. Outside of China (as Douyin must be used there), the preferred way to log in is
Facebook, Instagram, WhatsApp (all the same owners), Twitter or Google to ‘verify’ your identity.
Or go through the rigours of opening an account with your phone and email details and a strong verification process.
In doing so, TikTok sucks up your profile details, friends list, email address and more from that account. And because you used a third party, it can track web use as well. It is a data-harvesting app on your smartphone that is always with you. All in the guise of a Q&D 15-second video clip.
Why did the Microsoft deal fall over?
The Chinese government refused to allow its AI tech to fall into the hands of any western company.
Microsoft would have been the perfect owner for the western version of the app. It has AI, cloud, distribution and above all a moral compass.
What is the basis of the Oracle deal?
Establishment of a separate company called TikTok global. The company HQ will be in Texas (a Republican stronghold). It will have a majority of US directors, a US chief executive and a security expert on the board.
Trump says it would create 25,000 new US jobs. He refers to it contributing $5 billion towards US education.
Oracle acts as the ‘gatekeeper’ a.k.a. trusted technology partner. It will run TikTok on its US-based cloud servers effectively firewalling data from the Chinese. The US will also block the DNS of any external TikTok sites.
The deal, however, sees ByteDance continue to own and develop the software in China. There is no possible scrutiny of the code.
Oracle says that this will give the US public the security and confidence to use this app. It won’t hurt ByteDance owners obvious lust for money and provide a vehicle to list on a western stock exchange.
What Oracle has not revealed is the business model to finance this app. Sure it can generate hundreds of millions of dollars in advertising revenue for the company. But I suspect that monetisation of its user’s data will need to be far broader than that.
And if the deal goes south?
It is not a done deal yet. In fact the break-neck speed in bringing this together and the fact that the Chinese never, ever, say “no” directly to your face means that there is more than a good chance it will fall over.
YouTube and others have or will release a similar concept that may kill TikTok in the west anyway. ‘Tiktok times up’ remains a highly likely outcome.