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TikTok deal under risk from Chinese Gov’t’s New Rule

August 31, 2020

The popular app TikTok, should consider abandoning deals to be sold to US companies, says a trade expert.

This comes after the Chinese government broadcasted a new rule that could ban any such agreement anyway. Last Friday, the country stated that it would no longer allow certain artificial intelligence technologies to be transferred without a government license.

The technology that was affected by the new policy includes speech recognition, text analysts and software responsible for recommending new content.

It was assumed that this could affect TikTok – the popular Chinese social media app that several companies in the US are vying for.

Cui Fan, an instructor of international trade in Beijing, said that it would be likely to have to approach the Chinese administration for permission to be traded.

The professor believed there were two particular technologies used by TikTok that would be pertinent to the alterations – “personalised information push service technology based on data analysis” and “artificial intelligence interactive interface technology”.

The trade expert elaborated: “It is suggested that ByteDance carefully study the revised catalogue, seriously and carefully consider whether it is necessary to suspend substantive negotiations on relevant transactions, comply with statutory application and reporting procedures, and then take further actions as appropriate.”

Early this month, US president Donald Trump declared the app faced a US ban.

He said this could be evaded if an American company were to purchase TikTok’s US interests, and positioned a timeline of just three months to do this.

After hearing the news, firms together with Microsoft, Oracle, and now even Walmart propelled talks with ByteDance to secure proprietorship of the enormously popular app.

Analysts have assessed TikTok’s value to be anywhere in the middle of $20 billion and $50 billion.

Little is identified about the details of the gaining talks at the moment, though Microsoft is deliberated to be the prime candidate, having merged with Walmart.

The US trade colossal said: “We believe a potential relationship with TikTok US in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses.”

“We are confident that a Walmart and Microsoft partnership would meet both the expectations of US, TikTok users while satisfying the concerns of US government regulators.”

Spectators said Walmart could use the app to spread a superior number of individuals with advertisements if it were to lock a deal.

Reports have also arisen telling Twitter and Netflix were also considering a deal.

Mr. Trump has appealed TikTok could be a threat to US national security, which is the motive behind the prohibition.

He composed in a letter to House speaker Nancy Pelosi: “The spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States.”

In retort, TikTok declared it would sue to US government and deliberated the idea it posed as a national security threat.

The company stated: “We strongly disagree with the Administration’s position that TikTok is a national security threat and we have articulated these objections previously.”

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