Latest / Connecting the Dots / TikTok Rebuilt: American Ownership, Algorithm Control, and a Long Battle Ends

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TikTok Rebuilt: American Ownership, Algorithm Control, and a Long Battle Ends · Connecting the Dots

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  Today's tech news moves fast, but understanding
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  it shouldn't be hard. That's why Snarfl Solutions
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  Group brings you Connecting the Dots, where we
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  break down what's happening in tech and why it
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  matters to you. Now, let's dive in with your
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  hosts. Good morning, everyone. Happy Friday.
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  I'm Alex. And I'm Morgan. And welcome to Connecting
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  the Dots brought to you by the Snarful Solutions
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  Group right here in Sacramento. We are wrapping
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  up the week with some pretty historic news, honestly.
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  We really are. But before we get to the digital
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  headlines, we have to talk about what is happening
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  outside the window. It is Friday, January 23rd,
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  2026. And depending on where you're tuning in
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  $88 ,899. So down roughly half a percent. All
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  right, before we open up our Morningstar, that's
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  our Snarf full tech article report. We got to
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  .com. OK, let's get into it. Today is the day.
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  The bedline day. The literal drop -dead date.
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  We've been talking about a potential ban on TikTok
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  in the US since, what, 2020? It feels like forever.
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  There's been this looming cloud over the app
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  for years. And today, January 23rd, was that
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  final cutoff. And wouldn't you know it, just
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  like a college student turning in a term paper
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  at 11 .59 p .m. They got it done. They took it
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  right down to the wire. But the headline is,
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  TikTok is not banned, the app is staying, but...
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  the company running it is completely different
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  than it was 24 hours ago. Right. They finalized
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  this massive joint venture deal that restructures
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  the entire U .S. operation. Okay. So let's connect
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  the dots on this structure because the devil's
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  in the details. Who actually owns TikTok in the
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  U .S. now? The new company is officially called
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  TikTok USDS Joint Venture LLC. That's a mouthful.
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  It is. But the ownership split is the real story.
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  American and global investors now own 80 .1 %
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  of the U .S. operations. And ByteDance, the original
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  Chinese parent company. They're still there,
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  but they only retain a 19 .9 % minority stake.
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  Wow. That is a massive shift in control. So when
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  you say investors, who are we talking about here?
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  It's a specific consortium. The three big managing
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  investors are Oracle, Silver Lake, And MGX. MGX,
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  that's the investment firm based out of Abu Dhabi,
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  right? That's the one. So you've got US heavyweights
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  like Oracle and Silver Lake and then MGX. Each
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  of those three holds a 15 % stake. And then other
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  investors like the Dell family office fill out
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  the rest. Exactly. So the money has changed hands,
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  the equity has anyway. Which brings up the next
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  question. Does the leadership change, too? I
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  mean, if you change the owners but keep the same
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  boss. It matters, right. And yes, they're overhauling
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  the board. It'll have seven members, majority
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  American. And a new CEO. A new CEO for the joint
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  venture, yes. Adam Presser. He was the head of
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  operations, so he knows the company inside and
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  out. OK, that makes sense. But what about Shoxin
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  Chu, the global CEO we've all seen testifying
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  before Congress? He's still in the picture, which
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  is interesting. He'll sit on the board of this
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  new U .S. venture, but he's still the global
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  CEO. So there's still a link. It's just, it's
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  fascinating they pulled this off. I mean think
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  about the political whiplash. I know. You had
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  the first Trump administration trying to ban
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  it, then the Biden administration signed the
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  actual law requiring the sale. And now we're
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  back in a second Trump term and he's signing
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  the orders to make this deal happen. It's been
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  a bipartisan headache for six years. It really
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  has. But this deal saves the app for what a hundred
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  and seventy to two hundred million American users
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  Can you imagine the chaos if that app just shut
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  down today? I feel like office productivity would
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  have skyrocketed but morale would have just cratered.
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  We've seen riots in the streets Yeah, but let's
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  pivot because the corporate stuff is just paperwork
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  for the average user, right? What people really
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  care about is is the app gonna change? This is
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  where it gets really interesting and the short
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  answer is probably And it all comes down to the
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  secret sauce. The algorithm. Exactly. This wasn't
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  just about moving money. It was a national security
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  deal. And as part of that, the TikTok recommendation
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  algorithm, the thing that decides what you see
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  next, is going to be completely retrained. Retrained
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  exclusively on US user data. Let's unpack that.
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  Retrained. Does that mean it just like forgets
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  everything it knew before? In a sense, yeah.
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  For the US market. The whole point is to make
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  sure the feed is free from what the government
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  calls outside manipulation. So all the data is
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  going into Oracle's US -based cloud. Oracle is
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  the trusted security partner here reviewing the
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  source code. They're essentially building a digital
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  wall around the US data. So the brain of TikTok
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  in the US is getting, what, a reboot and then
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  retaught using only American inputs. That's a
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  pretty good way to put it. And analysts are saying
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  this is going to lead to a vibe shift. Kelsey
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  Chickering from Forrester actually predicts the
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  feed might start to feel distinctly American.
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  distinctly American. I'm trying to picture what
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  that even looks like. Does that mean we won't
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  see viral trends from like Europe or Asia anymore?
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  Not that you won't see them, but they probably
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  won't dominate the For You page in the same way.
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  OK, so explain that. Well, right now, if a dance
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  blows up in Seoul, the global algorithm sees
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  that velocity and pushes it to users in New York.
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  almost instantly. It's a global thing. Right.
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  A global zeitgeist. Under this new system, you
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  can still search for a creator in Tokyo, for
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  example, that interoperability stays, but the
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  ranking changes. The passive for you page experience
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  will be driven by domestic data. OK, so it's
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  like the difference between a library and a curator.
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  The library still has books from all over the
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  world, but the curator, the algorithm is only
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  putting American books on the display table.
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  That's a perfect analogy. You're not cut off.
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  But the suggestions are going to be much more
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  local. And that must extend to content moderation
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  too. It does. The new US venture takes over all
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  moderation policies in the country. The idea
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  is to stop any political tilting or misinformation
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  influence from the outside. You know, it really
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  feels like we're seeing the slow splintering
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  of the internet. A splinter net. A splinter net.
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  I like that. It's catchy. Even if it is a little
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  dystopian. But we have to move to our third story
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  because we have to follow the money. And the
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  numbers on this deal are surprising. You're talking
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  about the valuation. I am. The deal values the
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  U .S. unit at roughly 14 billion dollars. OK.
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  Now estimates suggest the U .S. entity alone
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  generates about 14 billion dollars a year in
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  ad revenue. So they sold the company for one
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  times its revenue. Yeah. That sounds like a clearance
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  sale price. Tech companies usually sell for way
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  more. What's going on? This is the key insight.
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  You have to look at what was actually sold. ByteDance
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  isn't selling the code to the algorithm. Oh.
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  They're licensing it. Exactly. They kept the
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  golden goose. OK, so they retain the core IP,
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  the technology that makes TikTok, TikTok. They
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  avoid a shutdown, keep a 20 % stake, and just
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  license the tech. For ByteDance, this is a huge
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  strategic win. If they'd been forced to sell
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  the actual source code, the price would have
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  been in the hundreds of billions. But because
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  it's a licensing deal. They're just renting out
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  the engine. They sold the car's body and seats,
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  but they're leasing the engine. And that engine
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  is going to be tuned by American mechanics now.
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  And it solves the political problem without them
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  losing their crown jewel. Speaking of politics,
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  the reaction has been something else. President
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  Trump went on Truth Social almost immediately.
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  He said he was so happy to have helped in saving
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  TikTok. But the part that really caught my eye
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  was that he thanked Chinese President Xi Jinping.
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  Which is huge, right? Because China has been
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  very resistant to letting this kind of tech go.
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  They have export control laws for algorithms.
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  Exactly. So Trump thanking Xi for... approving
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  the deal suggests there was some high level diplomacy
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  here. It just shows what a geopolitical football
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  this app has been. President Biden signed the
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  ban law in 2024 over national security. And now
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  Trump, who first tried to ban it, is taking credit
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  for saving it. It's a rare moment where the threads
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  of two different presidencies just weave together
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  like this. The scrutiny was bipartisan. The solution
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  is this complex deal that lets everyone claim
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  a victory. The U .S. government gets security
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  oversight. ByteDance stays in the market. And
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  the users. The users get to keep scrolling. But
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  the irony of selling for one year's revenue just
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  proves the value isn't the user base. It's the
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  algorithm. And they didn't put the engine in
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  the box. It's a fascinating case study. I'm really
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  curious to see if my feed actually feels different
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  next week. It won't be overnight. Retraining
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  an algorithm that complex has to take time. True.
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  But over the next few months, we might start
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  to notice the content feels a little more...
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  Familiar, a little more local. Well, as long
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  as I still get my cooking videos and the occasional
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  dog doing something silly, I think I'll survive.
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  I think the dogs of America are safe. They will
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  continue to provide content. Good. That's all
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  right, let's do a quick recap. The three things
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  you need to know about the TikTok deal. Story
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  number one. The deal. TikTok is staying. It's
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  now run by a joint venture, mostly owned by investors
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  like Oracle and Silver Lake, with ByteDance keeping
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  a minority stake. Story number two, the experience.
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  The app is getting an American reboot. The algorithm
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  is being retrained on US data only, which means
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  your trends might start to look different from
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  the rest of the world. And story number three,
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  the money. It's valued at a surprisingly low
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  $14 billion, but that's because ByteDance kept
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  the core tech. They're just licensing it. It
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  connects the dots between tech, finance, and
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  geopolitics in a way we rarely get to see. It
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  ends years of uncertainty, but it starts a whole
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  new experiment in how the internet is governed.
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  And it leaves us with that question. If we have
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  different algorithms for different countries,
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  are we still connecting with the world? Or are
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  we just looking in a mirror? That is a heavy
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  thought for a Friday, but a good one. That's
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  what I'm here for. Well, thank you all for tuning
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  in to Connecting the Dots. We hope this clears
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  things up. Stay warm out there. Drive safe and
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  have a great weekend. We're here to help at Snarful,
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  so reach out on our website if you have any more
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  questions. That's a wrap on today's top stories.
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  Remember, tech doesn't have to be complicated
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  and we're here to help connect the dots. If you've
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  got questions or want to learn more, visit us
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  at snarful .com. Thanks for listening and we'll
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  catch you next time.