Author | Meng Xiao | For more financial information | BT Finance Data Hub | The article contains a total of 3,884 words and is expected to take 9 minutes to read

TikTok CEO Shouzi Zhou stands at the epicenter of a global maelstrom.

After more than ten hours of server downtime, TikTok gradually resumed services amidst the highly anticipated "sell or ban" saga in the United States. Notably, this time, TikTok voluntarily shut down all services before the ban took effect.

According to the latest Global Times report, citing insiders, ByteDance has not reached any agreement with the US side. It was the US that decided not to enforce the bill for the time being, allowing TikTok to resume operations.

China Business News reports that in addition to sending shutdown notices to all TikTok users, ByteDance's overseas versions of CapCut and Lemon8 also simultaneously issued shutdown notices. This underscores ByteDance and Zhou Shouzi's resolve. Rather than waiting for the US to shut them down, they chose to voluntarily suspend services. According to the US's "sell or ban" logic, if ByteDance wants to continue operating in the US, it must sell, but ByteDance has repeatedly made it clear that it refuses to sell its related products.

Even with a new US administration in power, TikTok may not fare well, as Trump is still pursuing the goal of "eating" TikTok. According to CNBC, Trump hopes to create a new merged entity composed of Chinese and American companies (each holding 50% of the shares) but has made it clear that the US side will not contribute a cent to the holding, essentially aiming to get something for nothing. This poses a new challenge for Zhou Shouzi.

In a previous video response, Zhou Shouzi stated that he would do his utmost to ensure TikTok's continued prosperity. Regardless of TikTok's future, he believes he has done his best.

1

What Challenges is Zhou Shouzi Facing?

On April 24, 2024, US President Biden officially signed a bill passed jointly by the Senate and House of Representatives. Citing national security, the bill mandates that ByteDance abandon control of the TikTok platform. If ByteDance fails to sell its TikTok-related business as scheduled, the US government will remove the TikTok app from US app stores on January 19, 2025.

The so-called divestiture of control is essentially a ban imposed on TikTok. So, what are the reasons behind the US government's actions?

The national security claimed by the US is a form of hegemonic security. US hegemony manifests in many aspects, including political, military, currency, and media hegemony.

Back in May 2019, then-US President Trump signed an executive order declaring a national emergency, authorizing the US to ban telecommunications equipment and services provided by enterprises owned or controlled by "foreign adversaries".

On January 13, 2025, the week before the end of the Biden administration's term, the US government issued the "Interim Final Rule on Artificial Intelligence Proliferation." This rule divides countries and regions into three tiers, each subject to corresponding levels of restrictions when accessing the most advanced AI chips from the US. China is classified into the strictest tier 3 control category, banning its data centers from importing cutting-edge AI chips.

The motivations behind these measures are the same: the US is trying to maintain its technological hegemony by targeting Chinese technology enterprises.

This ban on TikTok is an action taken by the US to safeguard its media hegemony. As of 2024, TikTok's global monthly active user base has exceeded 1 billion, with the largest number of users in the US, approaching 170 million monthly active users. TikTok has become the most successful case of a Chinese social media platform going global.

The social media ecosystem and influence of TikTok are viewed by Western countries as a significant sign of the spread of "Chinese influence" in the US. The US is concerned that TikTok may manipulate public opinion and thereby affect American politics. Therefore, even out of a slight concern, the US is determined to implement the ban.

This TikTok ban is just the beginning. In the future, any Chinese products, including Xiaohongshu, may still face significant regulatory risks in overseas markets.

In fact, to dispel the doubts of the US government, Zhou Shouzi has made TikTok's operations in the US almost fully transparent in terms of data.

Zhou Shouzi has adopted a global data distributed storage strategy for TikTok, ensuring that all data of US users is strictly stored within the US and has entrusted Oracle, a US technology company, to provide comprehensive hosting services. Under this arrangement, TikTok's source code is rigorously reviewed by Oracle to ensure its compliance and security. If TikTok attempts any espionage activities or manipulates algorithms without authorization, Oracle, as an independent third-party hosting institution, has the ability to promptly detect and effectively prevent such actions. However, despite such meticulous measures, TikTok has still failed to avoid a crisis of trust from the US government.

It should be said that Zhou Shouzi has really tried his best.

2

What has Zhou Shouzi Endured Over the Past Year?

In the afternoon of March 23, 2023, TikTok CEO Shouzi Zhou finally released the long-repressed emotions during his ride away from Capitol Hill in Washington, DC. "His eyes were slightly red," recalled a TikTok employee who was present.

Prior to this, Zhou Shouzi had just undergone a five-hour hearing on TikTok, during which he was questioned successively by more than 50 members of Congress. Although his answers were often interrupted by abrupt "yes or no?" questions, making it difficult to elaborate, Zhou Shouzi maintained calm and restraint throughout.

Both within TikTok and outside observers generally believe that Zhou Shouzi handled the hearing quite successfully. Erich Andersen, then the head of government relations and general counsel of TikTok, excitedly described Zhou Shouzi's outstanding performance at the hearing as a "grand slam" in a conversation with a familiar former diplomat. Dell Cameron, a senior reporter for the Politics and Policy section of Wired magazine, also wrote in an article after the hearing that Zhou Shouzi demonstrated extraordinary patience.

The next day, the TikTok team conducted an in-depth analysis of online public opinion, and the results showed that 90% of TikTok users stood by Zhou Shouzi and expressed dissatisfaction with the US Congress. Zhou Shouzi is rapidly becoming a new icon for young people, and the number of followers on his TikTok account surged from 20,000 to 1 million. On platforms such as Twitter (now renamed X), Instagram, and Facebook, the voices of support and opposition were roughly equal, forming a 50-50 split. "Our previous prediction was 70-30 in favor," said a TikTok employee involved in public opinion monitoring.

Since the banning crisis four years ago, Zhou Shouzi has become cautious about launching new businesses in the US. In 2021, when TikTok embarked on its e-commerce business, it prudently chose to avoid the US market, which has the strongest consumption power, and instead conducted market tests in Indonesia and the UK first. At that time, TikTok's user growth in the US had shown a slowing trend, core indicators such as post submission rates had failed to meet expectations, and the revenue target of $12 billion set by the commercialization department had not been achieved.

Despite this, Zhou Shouzi has never given up on efforts to negotiate with the US government. To alleviate the US government's concerns about data security and content manipulation, TikTok proposed the "Texas Plan." This plan aims to isolate TikTok's US operations and provide the government with a regulatory window.

According to the plan, TikTok needs to migrate its US operating system to Oracle's servers in Texas and allow Oracle to supervise data inflows and outflows. At the same time, the modification of recommendation algorithm code and access to user data programs will also be independently reviewed by Oracle and third-party institutions. The data migration work was successfully completed in mid-2022. According to estimates by UBS analysts, TikTok needs to purchase approximately $650 million worth of cloud services from Oracle annually, potentially making it Oracle's largest customer for cloud computing services.

According to US media citing sources close to Zhou Shouzi, he slept very little during those more than 100 days, with only about 3-4 hours of rest per day.

Zhou Shouzi and the TikTok team also proposed the establishment of a new US Data Security Company (USDS) responsible for local operations, including but not limited to maintaining recommendation algorithms and managing user data. The appointment of the company's board of directors needs to be reviewed by the Committee on Foreign Investment in the United States (CFIUS), its employees must be US citizens or green card holders, and the government has the right to review employee backgrounds and refuse to hire specific candidates.

The TikTok team stated that it is taking an "unprecedented" open attitude by allowing Oracle to review the source code, including the recommendation algorithm, and granting the US government the power to unilaterally and temporarily shut down TikTok under specific circumstances, which the TikTok team calls the "Kill Switch."

Court documents show that from 2021 to 2022, TikTok held at least 14 meetings, conducted 9 written presentations, and sent 15 emails with the government regarding the "Texas Plan." However, after TikTok submitted its final proposal in August 2022, it did not receive any feedback from the government.

3

Zhou Shouzi's Dedication to TikTok

Zhang Yiming did not disclose how much he spent to recruit Zhou Shouzi from Xiaomi, but a preliminary assessment can be made based on the retention offer made by Lei Jun at the time. Lei Jun offered Zhou Shouzi 100 million shares of Xiaomi as a retention incentive. Based on Xiaomi's current share price, 100 million shares are worth approximately HK$3.5 billion, excluding salary. Zhou Shouzi is known as the "Emperor of Salaried Workers" because his current annual salary is as high as RMB 960 million, and some media reports claim that his annual salary after joining ByteDance was as high as RMB 700 million. If Lei Jun wanted to retain Zhou Shouzi, he would have had to offer a matching salary, which could have cost Lei Jun as much as over RMB 7 billion over four years.

The reason Zhang Yiming offered an astronomical sum to recruit Zhou Shouzi was his emphasis on the high-quality social media market in the US. At that time, the US social media market was basically monopolized by Zuckerberg's Meta family, with Facebook, Instagram, Messenger, and WhatsApp occupying an absolute monopoly position in terms of overall volume. However, Facebook has been established for over 20 years, and its overall atmosphere is no longer youthful, and its market share is gradually declining, from nearly 60% in 2020 to just over 50% today. The trend of decline is becoming increasingly apparent, which has also given TikTok an opportunity. After all, TikTok's development in the US has been exceptionally rapid, with advertising revenue more than quintupling in three years.

To adapt to local development in the US, ByteDance invited Kevin Mayer, the former head of Consumer and International at Disney, to serve as TikTok CEO in 2020, hoping he could leverage his familiarity with US political and business relations and the media landscape. However, what Zhang Yiming did not expect was that after taking office, Kevin Mayer, to appease US government pressure, advocated for pushing forward a plan to sell TikTok, which deviated from Zhang Yiming's idea of never selling. Even if Kevin Mayer was capable and well-connected, his disagreement with the founder's philosophy made his departure inevitable. As a result, Kevin Mayer only served as TikTok CEO for less than three months.

ByteDance then promoted Vanessa Pappas, then TikTok's COO, to CEO, but due to her mediocre performance, this was only a temporary solution during the transition period, and her abilities were not sufficient to serve as TikTok CEO. It was at this time (from 2020 to March 2021) that Zhang Yiming set his sights on Zhou Shouzi and successfully recruited him at a heavy cost, leading to a partnership that has become a legend.

Zhou Shouzi joined ByteDance in March 2021 as CFO and began concurrently serving as TikTok CEO in April. With Zhou Shouzi's arrival, TikTok placed greater emphasis on interest and real-time content, which enriched its ecosystem of merchants and influencers, giving it a natural "e-commerce gene."

Six months after Zhou Shouzi joined ByteDance, TikTok's MAU surpassed the 1 billion mark, and by the end of that year, it surpassed global giants like Google and Facebook to become the internet site with the highest traffic in the world that year. As of 2024, TikTok's global user base has exceeded 1 billion, with approximately 170 million users in the US, making it the most popular social software in the US. In 2021, TikTok's user base in the US was only 52.2 million, with the main user group being the Z and millennial generations that Zuckerberg has been desperately courting. During Zhou Shouzi's tenure, the user base grew by 120 million, and advertising revenue increased from $2.1 billion in 2021 to an estimated $11 billion in 2024. This has made the US TikTok's largest single overseas market.

Although Zhou Shouzi has secured a 90-day "reprieve" for TikTok, its future remains uncertain. However, regardless of TikTok's future, Zhou Shouzi may not have let Zhang Yiming down.

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