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China Is Winning the AI Wars with the Advent of TikTok Global

Like Huawei, ByteDance has come into the center stage of the cold tech wars. Trump’s version of competition sounds a bit like gangster capitalism, but if that’s what we want, China would never allow ByteDance to sell their consumer AI to the U.S.

ByteDance will not transfer algorithms and technologies to Oracle as part of a deal announced over the weekend to keep social media app TikTok operating in the U.S. Getting Walmart and Oracle to own 20% of TikTok Global and taking it IPO, means ByteDance will be stronger than ever, essentially the best funded AI startup in the world (Thanks, Softbank).

Bytedance’s CEO is a product genius many tiers above Snapchat’s founder. Backed by the Chinese Government ByteDance is yet another company out of China to take its version of surveillance capitalism global to out-compete Silicon Valley. Even with India’s ban, which was a significant blow, ByteDance has the secret sauce of a superior algorithm that makes Instagram or YouTube, well, old.

Trump’s inability to even get China’s AI, which ByteDance could replicate into any other number of apps like it will, means Facebook’s plot has been foiled. Gangster Capitalism indicates the U.S. can no longer keep up with the innovation of China. And ByteDance is a technology company the world has never seen before.

What Google and Facebook started, companies like ByteDance and Alibaba will complete. While Amazon, Apple and Microsoft are incredible companies, they don’t change the fact that China is superior in facial recognition AI, Fin-Tech, mobile innovation, E-commerce, blockchain, and soon, yes, artificial intelligence.

China needs to bolster itself in the Cloud and with its own chips. Once that is accomplished it will gain global market share in digital advertising, health tech, Ed tech, biotech and become even more dominant in AI and consumer apps.

TikTok is a story about the ascendancy of China and Silicon Valley’s downfall. China is the only country to have positive GDP in 2020. In the 2020s and 2030s it will massively out innovate the United States. Oracle will have the “authority to check the source code of TikTok” in the U.S but that doesn’t mean China will sell its AI.

Oracle will become TikTok’s cloud provider and a minority investor with a 12.5% stake. Walmart has tentatively agreed to purchase a 7.5% stake, and CEO Doug McMillon would serve as one of the five board members of the newly created company. That’s only around 20%. ByteDance will still control TikTok Global (HQ in Texas) and its IPO will be massive, likely in early 2021.

  • China actually gains an AI advantage with the TikTok Global deal. 

  • The deal does not entail any transfer of algorithms and technologies, according to a statement from ByteDance on Monday.

  • The company said Oracle can instead check the source code. ByteDance arguably becomes even stronger and will continue to develop TikTok and Douyin in ways that will totally disrupt Instagram, including their rather pathetic attempts at social commerce.

  • TikTok is a GenZ app at scale and this is training its AI in ways no American company will be able to replicate.

According to analysts TikTok’s recommendation algorithm has been a key driver behind its growth, helping to suggest other videos to users and keep them hooked within the app. However that’s not really true. Its secret sauce is funding from Softbank, insider support from the Chinese Government and next to unlimited funding to go global. That the new company will be called “TikTok Global” is so ironic and almost a parody of what Silicon Valley has become.

Let’s be honest, Google and Microsoft pander to China. China’s digital currency likely makes Facebook’s Libra project irrelevant and China is the true heir to the “surveillance capitalism” invented by Google that harvests data and monetizes digital ads that are incredibly lucrative. Silicon Valley did not understand what it was creating, and people like Mark Zuckerberg have created a human history where human freedom is diminishing online. AI is being weaponized. The evidence in America of this is staggering in 2020.

TikTok Global is a bit like China saying they have won the AI race. Even Oracle does not seem to understand its role in the partnership. Trump has no clue about the future of AI. Facebook’s ruse to try to ban TikTok failed. Surveillance Capitalism marches forward and ByteDance will profit and you practically need fact checking to understand the confusion.

TikTok Global will hire at least 25,000 in the U.S. while TikTok Asia will make Singapore one of its major global hubs. ByteDance meanwhile has many future projects planned. TikTok confirms it’s seeking an initial public offering in the U.S. in an effort to “further enhance corporate governance and transparency.” China has outsmarted the U.S. on consumer-AI on nearly every front from facial recognition to being able to clone its companies, their features and products.

TikTok Global has 100 million TikTok users in the U.S. alone. Walmart backing TikTok also suggests American companies are overtly already picking sides knowing Chinese companies are the future. We’ve seen this with Google and Microsoft’s behavior for a few years already. Walmart works directly with Tencent in China. It’s not exactly a secret. Soon Alibaba will be pretty significant globally in the Cloud and digital advertising, and not just E-commerce.

The future of AI isn’t owned by one country and with Europe increasingly frustrated by Silicon Valley’s disregard for anti-trust, the world is shifting. Companies like Huawei, Alibaba, ByteDance, Ant Group and Meituan really are on the cutting edge of innovation.

Silicon Valley is no longer equipped to compete with China’s innovation engine. The new generation of Chinese companies like ByteDance, they really don’t exist in America today. For the future of consumer-AI this suggests TikTok Global will help Chinese AI win.

TikTok Global, the firm that is to control the US operations of the video app TikTok, will launch an initial public offering. It claims the move is to enforce “transparency”.

ByteDance did not say how much money the new company plans to raise. However you can imagine it will easily raise a few $Billion, which will further enhance its AI and scale.

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