TikTok has a matter of weeks to secure a sale to an American buyer in order to avoid a US ban. The timetable looks increasingly tight.
What’s happening: Beijing appears to have just thrown a wrench in the process, my CNN Business colleague Sherisse Pham reports. On Friday, Chinese officials revised rules that govern the sale of certain kinds of technology to foreign buyers. The restrictions now cover data processing, speech and text recognition, according to government notices.
The notices did not name TikTok or its Beijing-based owner ByteDance. However, experts say that the rule change could give Beijing the power to block the sale of TikTok to a foreign company.
Former CEO Kevin Mayer indicated that a sale was imminent when he resigned from the role last week. In a letter to employees, Mayer said to expect “a resolution very soon” — a phrase indicating that a deal could be reached in coming days, according to a person familiar with the talks.
Analysts have pointed to a joint bid from Microsoft and Walmart as the clear frontrunner, though Oracle is reportedly also in contention. Yet the update from Beijing makes clear that there’s more at play here than just selecting from a list of suitors.
“Does this slow things down, or does it mean the value of this asset is not in the tens of billions mentioned recently, but perhaps zero?” Rabobank strategist Michael Every said in a research note Monday. “If so, this would very powerfully illustrate the point about how private companies can get swept away by the changing political economy.”
After all, the TikTok discussions don’t exist in a vacuum. China’s Ministry of Foreign Affairs slammed the US administration Monday, alleging that it has been engaged in “economic bullying” and “political manipulation” under the pretext of concerns about national security.
Earlier this month, the US Commerce Department announced fresh sanctions on Huawei, one of China’s top tech firms. Paul Triolo, head of geotechnology at Eurasia Group, said the restrictions could serve as a “lethal blow” to the company, and that Beijing is likely to pursue targeted forms of retaliation in response.
Step back: Microsoft and Walmart’s pursuit of TikTok has received lots of attention. But whether the Trump administration and Chinese officials can green-light a deal that’s satisfactory to both sides in half a month is an open question.