NEW YORK: The Chinese government is complicating the US-government-ordered sale of US TikTok assets.

China on Friday introduced export restrictions on artificial intelligence technology, seemingly including the type that TikTok uses to choose which videos to spool up to its users. That means TikTok’s Chinese owner, ByteDance, would have to obtain a license to export any restricted technologies to a foreign company.

The Trump administration has threatened to ban TikTok by mid-September and ordered ByteDance to sell its US business, claiming national-security risks due to that Chinese ownership. The government worries about user data being funneled to Chinese authorities. TikTok denies it is a national-security risk and is suing to stop the administration from the threatened ban.

Prospective buyers for US TikTok assets include Microsoft and Walmart and, reportedly, Oracle. Oracle has declined to comment.

On Saturday, Chinese state-owned media outlet Xinhua News Agency quoted government trade adviser and professor Cui Fan, who said that Bytedance should consider whether it should halt negotiations to sell TikTok in the US As with any cross-border transaction, we will follow the applicable laws, which in this case include those of the US and China, said ByteDance General Counsel Erich Andersen.

The Chinese government’s new restrictions may be a tactic to drive up valuation of TikTok, said RBC Capital Markets analyst Alex Zukin, who still expects a deal announcement relatively soon.” The Wall Street Journal reported last week that ByteDance is asking for $30 billion for the US operations, but has faced resistance from bidders.

Published in Dawn, September 5th, 2020