The Chinese Government’s Newly Imposed Restrictions on the export of Tech Advancement is about to Delay TikTok Sell-Off
So what’s the latest on the TikTok takeover stakes?
With the US Government’s September 15th deadline drawing ever-near, reports earlier in the week suggested that TikTok owner ByteDance had decided on a winning bid, and that an announcement was imminent. But complications arising from the Chinese Government’s newly imposed rules on the export of technological advancements, including digital algorithms, have basically stalled the process, with the parties involved now working to establish what, exactly, the new restrictions mean for any deal.
That, reportedly, has ByteDance and the TikTok bidders looking at four possible options:
- Sell TikTok’s assets without its algorithm
- Establish a transition period, which would allow the winning bidder to use TikTok’s algorithms for up to a year
- Seek permission from China to allow the full sale, including algorithms, to a US company
- The winning bidder licensing TikTok’s algorithm from ByteDance
Selling TikTok without its now-famed algorithm is probably not going to work for most.
As noted by tech analyst Josh Constine:
“TikTok will wither if China only allows an acquisition of its app, not its algorithm that digs the gems out of all the trash.”
Indeed, it’s TikTok’s addictive, compulsive nature that keeps users engaged, and without the technical details behind that system, its future success seems far less assured.
But that apparently isn’t a significant consideration for at least one bidder.
As reported by Business Insider, rival short-form video app Triller, which has formulated a $20 billion bid for TikTok, has said that it’s primarily interested in TikTok’s branding, not its algorithm.
Triller’s bid has largely been dismissed by most, with bigger players like Microsoft and Oracle – and even Walmart – offering more money, and future backing. But maybe, if the algorithm is made off-limits, and Triller is still willing to pay for what would essentially be a shell of the app, it could become the leading bid.
It seems like an odd move to take, especially at that price point, but Triller obviously knows the market. That it’s willing to buy TikTok’s branding alone underlines the faith many have in the app’s presence.
Right now, however, we’re waiting on the next development, which essentially comes down to what the Chinese Government will allow in the TikTok sell-off. If the algorithm is included, it seems likely that we’ll see TikTok changing hands very soon. But if not, the outcome seems widely uncertain.
But the clock is ticking – and you would think that, by the middle of next week, the path forward will need to be clear.
Yet, no matter what happens, the simmering tensions around the deal, between China and the US, don’t appear set to ease any time soon.
