TikTok entangled sale negociations explained by the debate around its algorithms - The summer tech hub, the sale of the TikTok business in the United States by ByteDance to circumvent the ban threats by US President Donald Trump-who considers it a Chinese spy app -, faces a new setback that points to one of the fundamental aspects that have made this short video app so popular with younger users.

Without knowing yet the winner of this auction by which they bid more strongly on the one hand Microsoft-linked to the supermarket chain Walmart -, and on the other the enterprise software company Oracle, the new Chinese restrictions on the export of artificial intelligence technologies could affect a nuclear aspect of TikTok: its algorithms.

Last week, China added to the list of products whose export must be controlled artificial intelligence technologies, such as those that recognize voice or text or those that analyze data to offer recommendations of appropriate content to each user; with the aim of "safeguarding national economic security," according to the Asian giant's government.

Knowing whether this restriction affects the algorithms that determine which videos are shown to each user of TikTok, a key technology in the platform's success, is right now the main stumbling block that both sides of the negotiation try to bypass, according to reports The Wall Street Journal. If so, the next step will be whether Beijing will approve the sale of this information, without which the deal could be in danger.

ByteDance has already indicated that it will comply with the Chinese government order, and according to the WSJ is trying to find out if the new restrictions affect its algorithm and how it should proceed in the event of a sale.

For potential buyers, acquiring the TikTok business in the United States without its algorithm completely changes the operation, since they consider that much of the value of the company is precisely that technology, which is what causes its users to remain so long attentive to the short video platform, assure sources familiar with the deal to The Wall Street Journal.

The two main bidders for the us business of TikTok are now Microsoft, who arrived to sign a letter of intent is not binding with ByteDance, said that he wanted to close on the purchase before September 15 and who joined last week the supermarket chain Walmart; and on the other hand, the business software company Oracle, whose founder Larry Ellison is a well-known supporter of Trump, who even got to bless a possible purchase of TikTok on your part.

TikTok entangled sale negociations explained

Twitter has also been linked to a possible association with the short videos app, The Wall Street Journal reported in early August, whose sources said there were "preliminary" conversations, although the social network of short messages declined to comment on the possible operation

Even Netflix was placed among those interested in buying TikTok in the United States, this time due to an alleged approach of the app's own parent company, Bytedance, reported by the WSJ, declined by the company led by Reed Hastings, which already considered TikTok one of its main competitors in a letter to investors on the occasion of its results for the first half of this year.

The sale of TikTok's operations in the United States is a negotiation against the calendar, which marks the executive order approved by Donald Trump, which gives his parent company ByteDance 45 days from August 6 before prohibiting him from carrying out any transaction with a U.S. citizen or company. This points to September 20 as the last day to close the deal that sells the business in the US to a company that does not weigh that threat, although some media such as The Verge point to the deadline could extend until November.

According to the document signed by Trump, TikTok, who has been ruled out 175 million times in the united States, where it has more than 80 million users, collect user data to "allow the Chinese Communist Party access to personal information of americans", because that would give the possibility to China to "locate federal employees and contractors, reporting of personal information for blackmail or to do corporate espionage".

The platform, on which they have heavy suspicions of being a potential source of cyber-espionage, it was also banned in India along with 59 other mobile apps of chinese origin, considering them a threat "to the sovereignty and integrity of India" in a context of tension geopolitics with the asian giant, and a year before it was banned by a local court that was considered "pornographic".

TikTok last week saw its CEO, American Kevin Mayer, step down from office just a few months after he took over the management of the company from Disney's streaming business. The executive pointed to the "drastic" change in the "political environment" as one of the keys to its exit.

End of TikTok entangled sale negociations explained

More on

"We have a historic opportunity to modernize our country": Nadia Calviño advocates digitalization as an engine of the economy

"We have a historic opportunity to modernize our country," said the third vice president of the government and Minister of Economic Affairs and Digital transformation of Spain, Nadia Calviño, at the 34th meeting of the Digital Economy and telecommunications organized by AMETIC.

The minister referred to the need to boost the digital transformation in Spain recalling the recent words of the president of the government that pointed out that 40% of European GDP will be digitalized in 2021.

In this line, Calviño said that" the situation resulting from the pandemic is accelerating the process of digitalization of our country", but that, although" it is highlighting our strengths", it has also brought to light the weaknesses of Spain.

The minister acknowledged that the biggest challenge lies in the digitisation of SMEs. "If we manage to tackle the digitisation of SMEs, we will be able to accelerate the productivity of our economy," he said, noting that these companies constitute the bulk of the business fabric of Spain and many have not yet taken the first step towards digitisation.

Calviño stressed that the transformation that Spain needs is reflected in the plan España Digital 2025 recently presented by the government and in which highlight the boost of connectivity through broadband, strengthening the leadership in 5G and the development of the digital capabilities of the company so that they can face a new world of work.

To make this a reality, the third vice-president has assured that 20 billion euros of public funds (much of them European funds) will be mobilised and they estimate an investment of 50 billion euros by the private sector.

Pedro Mier, president of AMETIC, said: "We have the right to demand that European construction funds be invested wisely in Spain".

Rami Aboukhair, CEO of Banco Santander in Spain, has called for ambition in the implementation of the reconstruction plan and has advocated public-private collaboration, assuring that it is time"for the recovery".

The minister has also sought to highlight the role of technology during the pandemic and noted the launch of the application Radar COVID that alerts the user if you are at risk of having been infected and has revealed that has more than 3.4 million downloads in the country and is operational in 10 autonomous communities after joining Madrid and Navarra.

You may also find interesting: