How TikTok backed itself into a corner

2 hours ago 2

You’d think that TikTok would have a Plan B by now.

It’s now clear the company never planned for a scenario in which it would lose to the Supreme Court. Maybe it couldn’t, given that the Chinese government ultimately has final say on a sale. Now, TikTok’s leaders are banking on Donald Trump to save them in a last-ditch effort that will unquestionably come with strings attached.

Politically, TikTok misplayed its hand at every turn of this multi-year saga. Executives repeatedly dismissed the possibility of a ban, even going so far as to literally laugh at the idea. They were blindsided by Congress overwhelmingly agreeing on a ban. Then, they lost on appeal to the Supreme Court with only a day left before the law goes into effect. The only leverage they seemingly have left is that Trump thinks the app helped him win the election — plus their willingness to let him extract whatever pound of flesh he wants.

TikTok backed itself into this corner technically, too. It spent over $1 billion on Project Texas to try and appease concerns about US data making its way to China. Amazingly, TikTok started Project Texas before the government gave its blessing, which of course never came. US data is now walled off in separate infrastructure maintained by Oracle, which will have to legally stop working with TikTok as of the 19th.

Undoing Project Texas now would be “a massive effort” involving many engineers, someone who worked on it recently told me. Shutting the app down, rather than merely removing it from US app stores, is TikTok’s only option. It’s unclear how this would impact the experience of using TikTok outside of the US. It’s an unprecedented situation.

Even still, TikTok is trying to play it cool externally. Blake Chandlee, the company’s president, told advertisers after the Supreme Court’s decision that “we’re optimistic about finding the best path forward” and to expect “next steps” before the ban goes into effect. Employees have yet to receive other directions internally, I’m told. As I wrote earlier this week, the mood is grim, even among those who worked at TikTok during the first ban attempt four years ago.

Given that no one wins if TikTok goes away, Trump will probably still find a way to make sure the app stays running in the US. He’s invited Shou Chew to sit on the inauguration dais and Elon Musk could be in play. But there’s no denying that ByteDance put itself in this corner. To get out of it, there will be a price to pay, and it’s going to cost more than money.

Elsewhere

Tech kisses the ring: The visual of tech CEOs at Trump’s inauguration on Monday will be striking. The CEOs of Apple, Google, Microsoft, Amazon, Meta, OpenAI, and more are descending on Washington DC this weekend to kiss the ring. The only major CEO to sit out the proceedings will be Nvidia’s Jensen Hunag, who is out of the country on business. X, Uber, Spotify, Mark Zuckerberg, Peter Thiel, David Sacks, and more are throwing parties in DC this weekend.
Meta’s fallout continues: CTO Andrew Bosworth admitted internally that some of the changes “were pretty ham-fisted” and are being reconsidered, including the removal of tampons from men’s restrooms. Mark Zuckerberg did damage control after it was reported that he blamed Sheryl Sandberg for the company’s DEI culture. He also announced that 5 percent of the company will be let go in cuts targeting “low-performers.” And the civil rights team was axed.
Other headlines: Democratic Senators are mad at tech CEOs for donating to Trump… Being deemed “critical AI talent” by your manager may help you get a raise at Microsoft… Amazon’s RTO mandate is off to a rocky start… SpaceX caught another rocket… Apple is disabling AI summaries of news stories.

Job board

Some recent, noteworthy job changes in the tech world:

Jay Parikh, Facebook’s early head of engineering and the ex-CEO of Lacework, is now leading a new Core AI engineering org at Microsoft. His org will be in charge of the “end-to-end Copilot & AI stack for both our first-party and third-party customer,” according to CEO Sayta Nadella.
Alex Dunlap, VP of productivity apps for AWS, is Andy Jassy’s new ‘shadow’ advisor at Amazon. Meanwhile, Ralf Groene reunited with Panos Panay to lead design for the devices org.
Tom Conrad is the new interim CEO of Sonos, replacing Patrick Spence. Read his full letter to employees. Chief product officer Maxime Bouvat-Merlin is also out.
Bumble founder Whitney Wolfe Herd is back as CEO.
Global Infrastructure Partners CEO Adebayo Ogunlesi joined OpenAI’s board.
Ex-Unity CRO Jules Shumaker was named Discord’s first chief business officer.
The former head of Snap’s content business, David Brinker, joined Character.AI as SVP of partnerships.