ByteDance vs. The White House: 1.7 Million Timelines Shaken by Algorithm Separation

1. Prologue: The Deadline Named "Separation"

On the midnight of July 9, 2025, a scoop released by Reuters shook the tech industry: "TikTok is developing a U.S.-exclusive app, to be operated with its own algorithm and user data." This report signaled the transition of the tug-of-war between ByteDance and Washington, which had been ongoing for over a year, to the "next phase"【Reuters】.

2. Legal Background: The Impact of the 2024 "Divest-or-Ban" Law

The origin lies in the "Foreign Harmful Apps Regulation Act" (commonly known as Divest-or-Ban), enacted in April 2024. This law grants the president the authority to order app-operating companies with national security risks to sell their U.S. operations or cease services. TikTok was forced to choose between separating the "U.S. version" by September 17, 2025, or a complete withdrawal【Reuters】.

3. The Full Picture of Project M2

This separation plan, known internally at TikTok as "M2," attempts an unprecedented challenge of "duplicating" existing code. The mission assigned to engineers is to completely replicate millions of lines of code, including the app itself, recommendation AI, advertising infrastructure, creator tools, and even content moderation, and transplant them to the infrastructure at the U.S. Oracle base. The launch target of September 5 is ridiculed as "technological suicide," but time is relentlessly pressing【Reuters】.

4. The Dilemma of Data Sovereignty and AI Training

The biggest challenge in the separation is the training data for the recommendation AI. TikTok explains that "M2 will relearn using only U.S. user data," but in reality, there is a risk of losing "topic diversity" due to the cutoff of global inflow. ByteDance headquarters internally analyzes that "performance degradation is inevitable," and the U.S. team is rushing to optimize the algorithm for a "U.S.-local orientation" through repeated user tests【Reuters】.

5. Washington's Intentions: Under the Name of "National Security"

The U.S. government advocates data sovereignty and propaganda countermeasures, but behind the scenes, the 2025 presidential election and trade negotiations are involved. President Trump states that "the TikTok deal is a good material for U.S.-China negotiations," openly aiming to encourage trade concessions from Beijing. On the other hand, the Chinese government shows little sign of allowing the "export" of valuable AI technology, and the sale scheme is already showing signs of stalling【Reuters】.

6. The Lineup of the Investor Consortium

The most promising acquisition consortium at present includes Oracle, Blackstone, Andreessen Horowitz, and existing shareholders like SIG and KKR. In the adjustment over investment ratios, "governance rights" are the focus, and how to handle the minority shares held by ByteDance is the biggest point of negotiation【Reuters】.

7. Impact on the Creator Economy

Millions of influencers make a living on TikTok worldwide. If the U.S. version becomes "isolated," international collaborations will be significantly restricted, and ad rates will inevitably be restructured. While it becomes easier for U.S. domestic brands to reach "purely American users," industries like fashion and K-POP that actively want to incorporate overseas trends will suffer.

8. The Scene of Social Media: The Storm of Approval and Disapproval on X and Reddit

The timeline of X (formerly Twitter) compiled by Techmeme is swirling with the honest opinions of creators and general users.

• "We don't need a government-sanctioned censorship app" (@metaldem0n)

• "If global reach disappears, business dies" (@roboking319)

• "In the end, it's just about U.S. companies wanting to control the data" (@mabman21)
  On the other hand, conservative voices welcoming the severance of influence from Chinese authorities are also prominent, polarizing public opinion【techmeme.com】.

9. Advertisers and Brands' Response Strategies

Major companies like Unilever and Nike are in a wait-and-see mode, stating they will "assess the metrics after the September launch." Small and medium-sized D2C brands aiming for new entry are considering test postings, believing "there will be fewer competitors in the initial phase of the algorithm." Media buying companies are preparing to manage old TikTok and M2 with separate campaign IDs.

10. Technological Challenges: The "Copy & Detach" of the Codebase

The separation targets are extensive, including AI model weights, machine learning pipelines, and live streaming infrastructure. Due to the restriction of "operation only permitted in the U.S.," repositories inaccessible to Chinese engineers are rapidly increasing, slowing down development speed. Internal Slack is filled with cries like "Builds aren't passing" and "CI/CD is dead."

11. Judicial Perspective and Precedents

In the 2020 WeChat lawsuit, the government lost over "freedom of speech." TikTok continues litigation with the same theory while secretly running a "safety measure" of "M2 construction = substantial fulfillment of government demands" as a two-pronged strategy. The U.S. Federal District Court is expected to make a decision this October.

12. China's Reaction and "Technology Export Regulations"

Based on the revised export control regulations in 2020, China's Ministry of Commerce designated "personalized recommendation algorithms" as strategic materials. If ByteDance transfers the algorithm to foreign capital, approval from the State Council is required. It is unlikely that Beijing will easily nod in agreement, and political risks are rather increasing.

13. Creator Strategy: Is "Dual-Base Operation" Realistic?

Some U.S.-based creators are moving to create a "mirror" on M2 while retaining their global version accounts. However, dual posting risks dispersing algorithm evaluation, and SNS consultants advise, "Major content should be re-edited for M2, shortened, and rotated quickly."

14. Ripple Effects on Media Business and Music Industry

Music hits originating from TikTok have grown to influence Spotify charts. If limited to the U.S., the possibility of global virality is halved, and labels are reconstructing promotion plans. On the other hand, for U.S. artists, "domestic demand" is expected to expand, increasing royalties.

15. Security and Privacy Evaluation

With the complete migration to Oracle Cloud, it is said that "data will remain in the U.S.," but experts point out that "the guarantee of observability is unclear." Furthermore, if U.S. government audits are conducted, ironically, the "risk of national snooping" increases.

16. New Trends in Startup Investment

Startups dependent on TikTok, such as Creator GPT and SNS analysis SaaS, are rushing to develop "M2 adaptation APIs." VCs are increasingly focusing on "local specialization gaps" as evaluation points and emphasizing vertical integration in the U.S. advertising market.

17. International Order and the "Algorithm Wall"

In the EU, under the DMA (Digital Markets Act), there is a move to mandate algorithm transparency. India completely banned TikTok in 2020. Global SNS is moving towards a "multinational, multi-code" system in response to each country's legal system. M2 is a symbolic case of this, marking a historic turning point where national borders are introduced into content flow.

18. Epilogue: Scenarios After September 5

If M2 is released as scheduled, the first week will undoubtedly be chaotic with bugs and UI differences. Still, many users will flock in search of "video supply," and advertisers will follow. However, if the decline in algorithm accuracy persists, it will be an opportunity for competitors like YouTube Shorts and Instagram Reels to capture the outflowing users. How much the "infinite scroll culture" built by TikTok will change due to national borders—the outcome will continue to be narrated by our "timeline."