2025

By Eduardo Baptista

BEIJING, Dec 20 (Reuters) – The content recommendation algorithm that powers the online short video platform TikTok has once again come under the spotlight after the app’s Chinese owner ByteDance signed binding agreements to form a joint venture that will hand control of operations of TikTok’s U.S. app to American and global investors, including cloud computing company Oracle.

Here is what we know so far about its fate, following the establishment of the joint venture.

IS BYTEDANCE CEDING CONTROL?

While the creation of this new entity marks a big step toward avoiding a U.S. ban, as well as easing trade and tech-related tensions between Washington and Beijing, there is still uncertainty surrounding the ownership of the recommendation algorithm, considered TikTok’s crown jewel.

Rush Doshi, who served at the National Security Council under President Joe Biden, said on X it was unclear whether the algorithm had been transferred, licensed or was still owned and controlled by Beijing, with Oracle merely providing “monitoring”.

The algorithm is deemed core to TikTok’s global success and until a few months ago, ByteDance’s position was that it would rather shut down the app in the U.S. than sell it.

But in September, Reuters reported, citing sources, that ByteDance would maintain ownership of TikTok’s U.S. business operations but cede control of the app’s data, content and algorithm to the joint venture.

The joint venture would serve as the back-end operation to the U.S. company and handle U.S. user data and the algorithm, sources said at the time, adding a separate division that will continue to be wholly owned by ByteDance would control the revenue-generating business operations such as e-commerce and advertising.

Those arrangements formed the deal contour announced on Thursday, two sources with knowledge of the matter told Reuters on Friday. The ByteDance-controlled TikTok U.S. entity would be the revenue-generating one, while the new joint venture will receive a portion of the revenue for its technology and data services, said the sources.

The Chinese government has yet to declare its stance on the signed deal. Beijing made changes to its export laws in 2020 that give it approval rights over any export of algorithms and source codes, adding a layer of complexity to any effort to sell or spin off the U.S. app.

WHAT MAKES THE ALGORITHM POWERFUL?

Analysts have said that it is not just the algorithms, but also how they work with the short-video format, that have made TikTok so successful globally.

But TikTok showed that an algorithm, driven by the understanding of a user’s interest, could be more powerful. Rather than building its algorithm on “social graph” like Meta has, TikTok executives have said that its algorithm is based on “interest signals”.

The short-video format enables TikTok’s algorithm to become much more dynamic and even capable of tracking changes in users’ preferences and interests across time, going as granular as what a user may like during a certain period of time during the day.

And the positioning of TikTok as an app built for mobile devices from the beginning also gave it an advantage over rival platforms that had to adapt their interfaces from computer screens.

TikTok’s early entry into the short-video market also gave the company a big early-mover advantage. Meta’s Instagram did not launch Reels until 2020 while Alphabet’s YouTube launched Shorts in 2021, both of which lag TikTok in years of data and product development experience.

WHAT DOES RESEARCH REVEAL ABOUT THE ALGORITHM?

TikTok also regularly recommends content that falls outside of users’ interests, which the company’s management has repeatedly said is essential to TikTok’s user experience.

A study, which researchers from the U.S. and Germany published last year, found TikTok’s algorithm “exploits user interests in 30% to 50% of the recommendation videos”, after examining data from 347 TikTok users and five automated bots.

“This finding indicates that the TikTok algorithm opts to recommend a large number of explore videos in an attempt to either infer better the user interests or maximise user retention by recommending many videos that are outside of the user’s (known) interests,” the researchers wrote in the paper titled “TikTok and the Art of Personalization”.

(Reporting by Eduardo Baptista; Editing by Muralikumar Anantharaman)

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BENTONVILLE, Ark. (AP) — As the number of skilled tradespeople dwindles in the United States, Walmart is trying to build up its own workforce to keep conveyor belts moving, refrigerated grocery cases cold, and drains and parking lots flowing.

The nation’s largest retailer and private employer revamped its training program last year to increase the pipeline of maintenance technicians who do everything from repair equipment to electrical work at Walmart’s distribution centers and stores — jobs that have become increasingly difficult to fill because of a shrinking labor pool.

The shortage has opened opportunities for people like Liz Cardenas, 24, who started at Walmart in May 2023 as an automation equipment operator at a distribution center in Lancaster, Texas, making sure boxes were securely taped and went through a conveyer belt upright. Today, she is responsible for fixing conveyor belts and other equipment when they break at distribution centers.

Cardenas, who nearly doubled her hourly pay to $43.50 per hour, said she plans to pursue more training, which will mean an even higher salary and more responsibility. It also means financial freedom.

“I was able to move out of my parents’ house,” she said. “I have my own apartment. I was able to get a car, and and I’m able to give more to my 401(k).”

A surge of retirements, along with a slowdown in immigration that began during the pandemic but now is accelerating with President Donald Trump’s aggressive deportations, are among the main factors behind labor shortages that bedevil some employers, analysts say.

But in skilled trades, the problem is even more acute. Consulting firm McKinsey analyzed 12 types of trade job categories, including maintenance technicians, welders, and carpenters, and predicted an estimated imbalance of 20 job openings for every one net new employee from 2022 to 2032.

McKinsey noted “the extraordinary rate of churn” could cost companies more than $5.3 billion every year in talent acquisition and training costs alone.

The shortages are happening as some companies are also laying off workers amid rising operational costs from new tariffs, shifting consumer spending and increased spending on artificial intelligence.

Business Roundtable, a lobbying group of CEOs from roughly 150 companies representing millions of employees nationwide, launched in June a new initiative to address worker shortages in skilled trades, including maintenance technicians. The initiative, co-championed by home improvement retailer Lowe’s, entails working with elementary, middle and high schools to raise awareness.

“While technology continues to evolve, it cannot replace plumbers, electricians, construction workers, maintenance and repair pros, or other tradespeople,” said Marvin Ellison, chairman and CEO of Lowe’s.

For its part, Lowe’s in 2022 started a 90-day online training program for employees who want to pursue jobs like carpentry and utility maintenance. Separately, its charitable arm has invested $43 million since 2023 to 60 organizations including technical colleges and non-profit groups to help recruit and train skilled tradespeople like maintenance technicians and plumbers.

Mervin Jebaraj of the University of Arkansas’s Walton College of Business in Fayetteville, Arkansas, noted these programs will help ease the shortages, but they won’t eliminate the gap, particularly given Trump’s clampdown on immigration.

“For as long as somebody physically needs to fix this, the shortage will persist, even though on the margins it’ll mitigate some of the shortage,” he said. “We don’t have enough people.”

Walmart CEO Doug McMillon recently told The Associated Press he believes part of the reason for the shortages is “lack of awareness.”

“I think most Americans probably don’t know what a tech makes that helps take care of our stores and clubs and that we can help them learn how to be a tech,” he said. “So we have a need to get the word out so that people know there are some great jobs.”

Walmart revamped its training program in the spring of 2024, focusing on its own workers with a tuition-free training initiative in the Dallas-Fort Worth area. This year, it added new training sites in Vincennes, Indiana, and Jacksonville, Florida. The initiative combines hands-on instruction and classroom learning in fields like heating, ventilation, air conditioning, electrical work, and general maintenance.

As of mid-November, almost 400 employees had graduated from the program, Walmart said. With its first class of 108 associates who completed the Dallas/Fort Worth pilot program, every graduate secured a technician role, putting them on a path to earn an average of $32 per hour. Walmart said its goal is to put 4,000 workers through the training program by 2030.

R.J. Zanes, vice president of facility services for the U.S. divisions of Walmart and Sam’s Club, said Walmart was able to attract workers from all over the country with different backgrounds, including employees running cash registers.

Maintenance technician roles are crucial to keeping Walmart’s operations running smoothly, but especially so during the holiday season. For example, if a refrigeration system goes down within a Walmart store, it could cost up to $300,000 to $400,000 worth of lost product, according to Zanes.

“We’ve got to stay out in front of that,” he said. “We have to ensure that we’ve got the right skills there to do preventative maintenance, and when we do have a breakdown, to make sure that we get it back up as fast as possible to minimize that cost of downtime.”

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