Leaked Court Documents Reveal Susquehanna's Pivotal Role in ByteDance and TikTok's Origins

Newly unsealed court documents have shed light on the untold story of ByteDance's origins, revealing the significant involvement of Susquehanna International Group, a firm founded by Republican megadonor Jeff Yass, in the development of the technology that powers TikTok.

The leaked documents show that Susquehanna invested in a Chinese real estate startup called 99Fang in 2009, which had a sophisticated search algorithm. Susquehanna employees were deeply involved in the company, even handpicking the CEO.

The court documents indicate that the CEO and search technology from 99Fang later resurfaced at ByteDance, the company that owns TikTok. ByteDance, now one of the world's most valuable startups with a valuation of $225 billion, has a complex origin story. The documents reveal that Susquehanna was more deeply involved in TikTok's genesis than previously known, nurturing the career of ByteDance's founder, Zhang Yiming, and signing off on the idea for the company.

Why this matters: The revelations about Susquehanna's involvement in ByteDance and TikTok's origins raise questions about the intersection of social media, federal regulations, and electoral politics, given Yass's history of funding anti-LGBTQ causes. As lawmakers debate the risk level TikTok poses to American security, the extent of Susquehanna's relationship with ByteDance, in which it has tens of billions of dollars at stake, is under scrutiny.

According to the reporting, Susquehanna spent $5 million in 2012 to acquire a 15% stake in ByteDance when it was a startup. As TikTok grew into a tech giant with over 1.5 billion active monthly users, Yass and his firm are reported to have pocketed tens of billions of dollars. The emails of Yass, which have been turned over as part of the case, are not included in the public trove, so his personal involvement in ByteDance's formation is likely to remain unknown.

The push to either split TikTok from its Chinese owner, ByteDance, or ban it in the U.S. is gaining momentum. House Speaker Mike Johnson has bundled the TikTok divestment legislation into a foreign aid package, which may force the Senate's hand to act on the bill. This move is concerning for ByteDance investors, which include major American financial firms like General Atlantic and Sequoia Capital, as well as Susquehanna International Group, the firm founded by Yass that owns a roughly 15% stake in ByteDance worth billions.

While the two sides dispute the origins of ByteDance's technology, the court documents make clear that the company emerged from 99Fang's real estate efforts. The leaked documents highlight the complex connections between U.S. investors and Chinese tech advancements, raising questions about the influence of such relationships on national security and privacy as lawmakers and intelligence communities express concerns about ByteDance's potential ties to the Chinese government and the risk of compromised user data.

Key Takeaways

• Leaked documents have revealed Susquehanna's deep involvement in ByteDance's origins, including CEO selection.
• Susquehanna invested $5M in ByteDance in 2012, now worth billions as TikTok grew.
• Susquehanna founder Yass's anti-LGBTQ funding raises concerns over TikTok's political influence.
• Lawmakers debate TikTok's national security risks, with a push to split it from its Chinese owner.
• Leaked docs highlight complex US-China tech ties, raising questions about data privacy and security.