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Original title: US Media: TikTok acquisition negotiations are stalled and a bidder agrees that the transaction does not contain an algorithm.
[Artículo / Red de observadores Liu Chenghui]When the outside world believed that the TikTok acquisition negotiations had come to an end, China adjusted and published the “Prohibited and Restricted Export Technology Catalog”, which included the clause of “customized information insertion service technology based on data analysis “in the export restriction section, Interpreted by the media as directly targeting TikTok’s algorithm technology.
“The Wall Street Journal” quoted a source on September 1 local time as saying that the introduction of the new regulations put the acquisition negotiations at a standstill.
The Wall Street Journal reported on day 1: TikTok negotiations are in trouble due to the fate of the algorithmAccording to the report, TikTok’s core algorithm was considered to be included in the transaction prior to the introduction of new Chinese regulations.
A source familiar with the negotiations said that for bidders,“TikTok without algorithms is like a luxury car with a cheap engine”,whyA large part of TikTok’s value lies in its core algorithm. If the algorithm cannot be included in the transaction, it will completely change your vision of acquiring TikTok.。
Another person close to the bidder said that if the algorithm cannot be obtained through acquisition, the transaction may not proceed.
But it was also revealed thatOne of the bidders can still buy TikTok without an algorithm and write a new algorithm for it.
It is worth noting that after the introduction of the new regulations in China on August 28, the US Consumer Business and News Channel revealed on the 31st that TikTok confirmed the buyer and announced the transaction on September 1. But obviously this claim has not been made. On September 1, Bloomberg quoted a source as saying that Bytedance founder Zhang Yiming is weighing the impact of the new regulations and considering other options.
In recent years, the TikTok business in the United States has developed rapidly. According to a document presented by TikTok in late August this year, the number of monthly active users of TikTok in the United States has reached 100 million. This figure has increased by almost 800% compared to January 2018. Some industry analysts believe that having a powerful core algorithm is the key to the success of TikTok, which can recommend different types of content to users based on their preferences. The Wall Street Journal stated that as a “secret weapon” of TikTok, it is these algorithms that have aroused great interest from users on TikTok.
Eugene Wei, a San Francisco startup investor and former tech company executive, believes TikTok’s success is the result of Bytedance’s dominance in artificial intelligence technology. TikTok can observe how users interact with the video and then send the results to the algorithm, so that the application can provide users with highly personalized content.
Currently, all parties to the negotiation are trying to find out whether the algorithm transfer needs to be approved by the Chinese government; if necessary, it is still in doubt whether the Chinese government approves it. Several complex problems make it impossible to quickly conclude the transaction.
On August 30, after the announcement of the new regulations, TikTok’s parent company ByteDance once stated that it would strictly follow national regulations to deal with companies related to the export of technology. The sources said that Bytedance is seeking information from the Chinese government on how the TikTok acquisition will proceed if the TikTok algorithm is included in the scope of the new regulations.
Currently, there are two main groups participating in the TikTok offering. One is the alliance formed by Microsoft and Walmart;Atlantic OceanInvestors, including the investment group, cooperated.
On the 27th, the US media revealed that the sale of the TikTok business in North America, Australia and New Zealand by ByteDance could be concluded in the next 48 hours, and the size of the transaction could range between 20,000 and 30,000 million Dollars. However, new regulations enacted by China have added variables to the transaction. Bloomberg analyzed that considering the time required for approval by the Chinese government, the sale of TikTok may be delayed until after the November US elections. Can the TikTok transaction finally be reached? I’m not sure yet.
It is worth mentioning that in such circumstances, the president of the United States, Trump, who promoted the “strong buying and selling” of TikTok, threatened again. On September 1, Trump insisted that the transaction deadline must be September 15 and that the federal government should receive “rich compensation.”
On August 30, Chinese Foreign Ministry spokesman Zhao Lijian emphasized that the main purpose of China’s promulgation of the “Catalog of Prohibited or Restricted Technologies for Export” is to regulate the management of technology exports, promote scientific and technological progress and foreign economic and technological cooperation, and safeguard national security.
Zhao Lijian emphasized that US attempts to adopt economic intimidation and political manipulation tactics against non-US companies, be it a political coercion transaction or a mandatory government transaction, amount to clever looting. Not only does it violate market principles and international rules, but it also constantly announces to the US itself the irony of the principles of a market economy and fair competition.
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