TikTok Proved Silicon Valley Is Done Innovating

About a month from now, TikTok — the Chinese-owned, video-sharing phenomenon — must sell its U.S. operations. Given the app’s 50 million daily users, this forced divestment by President Trump has ignited a frenzied auction now pitting tech giants  against one another.

The White House and Big Tech are dressing up the TikTok saga as a combined story of national security and opportunistic capitalism amid unfortunate geopolitical tension between the U.S. and China. But the ultimatum to ByteDance, TikTok’s owner, is more accurately understood as a sordid window into Silicon Valley’s utter failure to innovate, and a warning signal of its transformation into a mere guardian of long-established turf. It is the Valley nakedly abandoning its long-argued orthodoxy that it can and should be left alone to invent its way into global tech leadership.

Huawei, another target of the Trump administration’s tech war with China, best foreshadowed the optics. In  in March 2019, chairman Guo Ping said, “The U.S. government has a loser’s attitude. They want to smear Huawei because they can’t compete with us.”

This is about more than just the sale: ByteDance produced the hottest new social media platform on the planet, and Facebook, in typical fashion, responded by unabashedly copying TikTok, adding a feature called Reels to Instagram, just as it has copied older IPs like Snapchat and Twitch or absorbed firms like Oculus and WhatsApp. The rest of the tech community has either remained silent about confiscation as a business practice or jumped headlong into the fray.

Silicon Valley is just fine with the gun put to the head of ByteDance, whose negotiating leverage is much-diminished given the circumstances — an American tech company will get a sweetheart deal because the Chinese company cannot walk away entirely from the sale. Just another day wringing out profit from vulnerable, innovative rivals for Silicon Valley, once a libertarian-tinged bastion of bootstrapping free enterprise, now a profiteer of the standard shakedown.

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