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New technology export rules in China could affect TikTok sale to a US company

New technology export rules in China could affect TikTok sale to a US company


The new rules may require a license for Beijing-based ByteDance to sell the video platform

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Illustration by Alex Castro / The Verge

Plans for a TikTok sale may have a new obstacle, with China implementing new rules on AI technology exports, The New York Times reported. The new export control rules, which focus on technology the Chinese government considers sensitive, could mean that TikTok’s parent company, Beijing-based ByteDance, might need a license before it can sell TikTok to an American company.

The updated regulations prohibit exporting technology including text analysis, voice recognition, and content suggestions without a license from the Chinese government. According to The Wall Street Journal, a Chinese government official told state-run Xinhua News Agency that ByteDance should “seriously and cautiously” consider halting talks for a sale of TikTok.

Microsoft has been the front runner in talks to acquire TikTok which will apparently involve Walmart, and reports suggesting everyone from Twitter to Netflix to Oracle also were in separate talks with TikTok. Amid all the chaos, TikTok CEO Kevin Mayer resigned August 27th, less than six months into the job.

President Trump signed an executive order August 6th blocking all transactions with ByteDance, and has demanded that an American company purchase TikTok’s US business. The order was intended to take effect within 45 days. Then on August 14th, the president signed an order giving ByteDance 90 days to sell or spin off TikTok in the US, the culmination of an investigation of the company by the Committee on Foreign Investment in the US (CFIUS), which oversees foreign acquisitions of US companies for any potential security risks.

It wasn’t clear Saturday whether the Chinese government would seek to block a TikTok sale entirely.

The wildly popular video-sharing platform hit 2 billion downloads globally in April, with 315 million downloads in the first quarter of the year alone.

A TikTok spokesperson declined to comment Saturday.