China puts a spanner in TikTok sale negotiations by imposing AI export restrictions

ByteDance must do the bidding of two governments now if it wants to sell its video-sharing app to a US firm

China's government has introduced new rules on the export of artificial intelligence (AI) technologies, making it mandatory for ByteDance to receive Beijing's approval before selling the US operations of its TikTok app to an American company.

According to Bloomberg, the Chinese Ministry of Commerce published a revised list of 'forbidden and restricted technology exports' last week, which includes AI interface technologies such as speech and text recognition, and the technologies that are used to analyse data to make personalised content recommendations to users.

The export of such technologies is restricted, but not banned, by the Chinese government, meaning that firms like ByteDance may still be able to sell their AI algorithms to foreign firms; although they would first need to apply for an export licence, which could take up to 30 business days. In other words, the new export guidelines are expected to slow ByteDance's negotiations to sell the US business of its TikTok app to an American firm.

In a statement, ByteDance said that it was aware of the new restrictions imposed by the government on technology exports and would "strictly comply" with them.

"As with any cross-border transaction, we will follow the applicable laws, which in this case include those of the U.S. and China," ByteDance general counsel Erich Andersen said in a statement.

The Trump administration said last month that ByteDance must sell TikTok's US operations or face a ban in the country. The government said it is concerned that the Chinese app could spy on American users and share their private data with the Chinese authorities.

TikTok rejected the accusations and said last week that it would challenge Trump's directives in the court.

So far, Microsoft, Oracle and Twitter have shown interest in buying TikTok's US business. Microsoft said last month that it was exploring a deal to buy TikTok's operations in the US, Australia, New Zealand and Canada; and last week, Walmart announced it was joining forces with Microsoft in its bid to purchase the popular video sharing app.

"We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of U.S. government regulators," Walmart said in a statement.

Meanwhile, Oracle is reportedly ready to pay $20 billion to acquire TikTok.

Last week, the Wall Street Journal reported that TikTok is asking $30 billion for its US business, but that bidders are unwilling to pay that much. The media outlet said on Sunday story that talks on TikTok deal have somewhat "slowed".