Chinese export restrictions on AI technology could complicate TikTok sale: report

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NEW YORK – Chinese government complicates U.S. government-ordered sale of U.S. TikTok assets.

China on Friday introduced restrictions on the export of artificial intelligence technology, apparently including the type TikTok uses to choose which videos to send to its users. This means that TikTok’s Chinese owner, ByteDance, would need to obtain a license to export any restricted technology to a foreign company.

The Trump administration threatened to ban TikTok by mid-September and ordered ByteDance to sell its U.S. business, citing national security risks over this Chinese property. The government is concerned about the transmission of user data to Chinese authorities. TikTok denies it is a national security risk and is suing to prevent the administration from the threat of ban.

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Potential buyers of US TikTok assets include Microsoft and Walmart and, reportedly, Oracle. Oracle declined to comment.

China’s state-run Xinhua News Agency on Saturday quoted government trade adviser and professor Cui Fan as saying Bytedance should consider halting negotiations to sell TikTok to the United States.

FILE – In this file photo from July 21, 2020, a man opens the “TikTok” social media app on his cell phone in Islamabad, Pakistan. Walmart said Thursday, August 27, that it wanted to partner with Microsoft to buy the US business of TikTok, the popula

“As with any cross-border transaction, we will follow applicable laws, which in this case include those of the United States and China,” said Erich Andersen, General Counsel of ByteDance.

The new Chinese government restrictions could be a “tactic to increase the valuation” of TikTok, said Alex Zukin, analyst at RBC Capital Markets, who still expects an announcement of a deal “relatively soon”. The Wall Street Journal reported last week that ByteDance was asking $ 30 billion for US operations, but faced resistance from bidders.

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Microsoft and Walmart declined to comment on Monday.

White House Press Secretary Kayleigh McEnany, in a White House briefing, did not directly respond to whether the administration would agree to a sale of TikTok’s U.S. assets if the deal went for approval from the Chinese government. “Negotiations are underway on a sale of TikTok, so we’re not going to stop ourselves from negotiating,” she said.

Associated Press editor Kevin Freking contributed to this report from Washington.

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