Zhang Yiming is not the only socially reticent tech billionaire. But the political challenges faced by the chief executive of ByteDance, who is stepping down, are uniquely nerve-shredding. The Chinese group is stranded in a free fire zone in the US-China tech war thanks to its popular livestreaming service TikTok.
The entrepreneur — if he is genuinely taking a back seat — would be trading a nightmare for the daydreams he says he prefers. Realpolitik should be served by his lower profile, even as he retains a key role at ByteDance.
Zhang is credited with helping design the core algorithm that reportedly powers both TikTok and Chinese equivalent Douyin. In just nine years, privately owned ByteDance has attained a valuation of $250bn and has 100,000 employees. But the social media group’s ownership of TikTok and Douyin — and their possible shared technology — has fuelled US spying fears.
Washington considered TikTok a national security concern. Listing plans foundered and the Trump administration made clumsy efforts to force ByteDance to sell. The Biden government is reviewing the orders that fostered an abortive deal with Oracle and Walmart. China is, meanwhile, clamping down on prominent tech bosses.
Liang Rubo, Zhang’s college roommate and ByteDance’s human resources head, is stepping up to CEO and the daunting task of simultaneously appeasing Washington and Beijing. India, for its part, has banned TikTok completely.
Liang must deal with a saturated streaming market at home, which tech giants Tencent and Alibaba have entered aggressively. The pandemic triggered a live streaming boom that more than doubled the sales of TikTok and Douyin to $35bn last year. Further upside is limited. As a result, the new boss should focus on building up fledgling ecommerce and education hardware businesses, even as he seeks to assuage US hostility.
Zhang’s decision to step down has received as much attention as Jack Ma’s retirement as chairman of Alibaba in September 2019. But Zhang’s net worth, estimated at $60bn, may not take too much of a hit. Alibaba shares rose about 30 per cent in the four months following the move by Ma, who is now in hot water with the Chinese authorities.
The elevation of the little-known Liang should help ByteDance at home, amid the crackdown on tech giants. That reality does not disprove the official line on Zhang. Political controversies can impose crushing stresses on CEOs. Both explanations may be equally true.
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