There has been a sudden twist in the report that Oracle has been chosen by ByteDance over Microsoft for the acquisition of TikTok’s US operations. Chinese state media, CGTN reported Monday that ByteDance will not be selling TikTok to Microsoft or Oracle, as the Chinese company is not willing to give its source code to any US buyers.
CGTN broke the news citing sources. The new development thus aligns with Chinese government’s stand on the US’ move to force the sale of TikTok’s America operations.
The Chinese government on Friday August 28, updated its list of technologies subject to export restrictions to cover a number of new areas that includes voice recognition and chip design. The update means that TikTok’s parent company, ByteDance, will need Chinese government’s approval to sell the app.
TikTok is powered by a number of artificial intelligence cutting-edge technologies that the Chinese government is not willing to let into the hands of Americans. Beijing said last week it would prefer the app’s US operations getting shut down to selling to American company. Experts said that China is unlikely to approve a sale of TikTok as it’s considered giving away its core algorithm.
“The newly-added article 21 over ‘personalized information push service technology based on data analysis’ and article 18 about ‘artificial intelligence interactive interface technology’ may have something to do with ByteDance,” said Cui Fan, a professor of International trade at the University of International Business and Economics in Beijing.
He added: “If ByteDance plans to export related technologies, it should go through the approval procedure. The company’s rapid development in international business relies on its strong domestic technical support, and it continues to provide overseas companies with its latest core algorithm.”
ByteDance’s rapid rise has been attributed to its use of algorithms to serve up videos, memes, news articles and other contents across its platform, among other things. Its artificial intelligence learns human behavior faster and more accurately to serve users what they really need.
As TechCrunch noted in a report, machine learning does away the need for human curation and even social and interest graphs, forming virtuous cycles within ByteDance services- the more content one consumes, the better the apps get at predicting one’s interest. The data-driven process transcends cultural differences, arguably why TikTok became the first consumer app from China to conquer the West.
TikTok has been trying to avoid a sale of its US operations. The company sued the United States government last month and has lobbied for more time to finalize possible deal with Microsoft, Walmart or Oracle.
But US President Donald Trump said last week there is no going back on the September 15 deadline that TikTok has to sell its US operations, and ByteDance said it will abide by the new Chinese that requires the government’s license to sell technologies such as TikTok’s.
“We are studying the new regulations that were released Friday. As with any cross-border transaction, we will follow the applicable laws, which in this case include those of the US and China,” ByteDance General Counsel Erich Andersen said in a statement.
Caught between unwavering powers, TikTok’s future in the United States hangs in the balance. There is one more day left on the deadline, pushing the short video app to the cliff of losing its growing population in the United States.