Partnerships / Acquisitions

Report: China Must Approve TikTok Sale Under Its New Rules On AI


As TikTok, the short video-sharing app, faces a Sept. 15 deadline to sell its U.S. operations to an American company, its sale could be slowed by the Chinese government, according to a Bloomberg report.

New restrictions imposed by Beijing on the export of artificial intelligence (AI) technologies will require approval by the People's Republic of China, Bloomberg reported, citing a source.

In the name of safeguarding users’ personal information, President Donald Trump earlier this month issued an executive order banning U.S. companies from doing business with ByteDance, TikTok’s parent company, and ordered its sale to an American firm.

Trump has alleged the app poses national security risks because the company could pass along data about users to the Chinese government.

Chinese Commerce Ministry spokesman Gao Feng said at a press conference the allegations are without merit. He urged the White House to end its “wrong” practices, stop its “unwarranted suppression of Chinese enterprises,” and do more in the interest of the trade and economic cooperation between the two countries and the well-being of the people.

Under the Chinese government’s new rules, AI technologies including speech, text recognition, and data analysis were added to the list of export-control products by the Ministry of Commerce, the news service reported. These are technologies used in the TikTok app.

As a result, any overseas sale would require government authorization to “safeguard national economic security,” Bloomberg reported, adding its source said the new rule is intended to put sales on hold but is not an outright ban.

Cui Fan, a professor at Beijing's University of International Business and Economics, told the government’s Xinhua News Agency that ByteDance should study the new export list and cautiously consider whether it should end the negotiations, Bloomberg reported.

Last week, Walmart confirmed it has joined Microsoft to buy TikTok’s U.S. headquarters in Culver City, California, and the company’s operations in Canada, Australia and New Zealand. The deal could be worth as much as $30 billion.

TikTok’s interim CEO Vanessa Pappas said the two companies have lots in common.

Oracle has also submitted a rival bid to ByteDance to buy TikTok.

Last week, Reuters reported Triller, a Los Angeles-based AI-powered music video app that enables users to make professional videos, made a $20 billion offer with investment firm Centricus Asset Management, a London-based global investment firm, to buy TikTok's operations in several countires.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.