TikTok Deal Talks Stall Over Algorithm Dispute: Report

Deal talks between U.S. companies and TikTok hit a snag late last week, when uncertainty arose over whether TikTok’s algorithms would be included in any package. 

According to the Wall Street Journal, restrictions issued by the Chinese government last Friday, which place new rules on the export of artificial intelligence technology, threw into question whether TikTok’s algorithms could be included in a sale to a U.S. buyer.

Participants in the talks are trying to figure out what, if any, approvals they would need from the Chinese government for a sale to go through. And that has diminished the chance that a deal will be completed soon, according to the people familiar with the discussions, because the algorithms are considered a vital part of the app’s value. 

TikTok’s owner, Bytedance, is asking for $30 billion for the app’s U.S. operations, according to the WSJ. 

There are two main parties vying for TikTok: Microsoft  (MSFT) – Get Report and Walmart  (WMT) – Get Report, which are jointly pursuing the deal; and Oracle  (ORCL) – Get Report, which has formed an alliance with some of TikTok’s private equity investors. 

The potential deal is also fraught with political drama, with President Trump recently signing an executive order banning transactions between TikTok and any U.S. firm, citing security reasons, unless an American firm buys it. Last week, TikTok sued the Trump administration over the executive order. 

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