Uncertain Approval from China... Prolonged TikTok Big Deal
[Asia Economy Reporter Koo Chae-eun] The deal between Chinese video application TikTok and American company Oracle has received approval from the United States, but uncertainty is growing as approval from the Chinese government remains unclear.
On the 24th, foreign media including CNET predicted that the Chinese government would not easily agree to the transfer of TikTok's key competitive advantage, the 'algorithm' technology.
The media quoted a post on social media by Hu Xijin, editor-in-chief of China's state-run Global Times. Editor Hu Xijin stated, "The Chinese government will not approve the TikTok deal at this time because this agreement threatens China's national security, interests, and dignity."
China's export restrictions also pose a major obstacle. Earlier in August, China began imposing export controls on artificial intelligence (AI) technology, which is expected to delay the TikTok deal. Most functions used in TikTok's AI, such as data processing, text analysis, content recommendation, and voice recognition, are prohibited from export without China's permission.
Meanwhile, TikTok, the Chinese video-sharing application used by 100 million people in the United States, is currently negotiating a share transaction with American companies. Oracle, Walmart, and TikTok plan to establish 'TikTok Global,' headquartered in the United States, with Oracle and Walmart holding a 20% stake.
If the deal is finalized, considering that American investors hold 40% of ByteDance's shares, American capital will ultimately secure 53% of TikTok Global's shares. However, negotiations are being prolonged due to US-China conflicts and disputes over share control.
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