TikTok parentByteDance asked the Chinese government for approval to export technology, Bloomberg reported Tuesday.- In August, China expanded its rules on exporting AI-based technology, effectively requiring that any TikTok deal receive its blessing.
- TikTok's powerful, secretive algorithm is its most valuable asset and has been a pivotal part of discussions around what the company would look like under new ownership.
- Trump and the Chinese government both hinted at blocking a preliminary deal for Oracle and Walmart to take over TikTok as confusion erupted earlier this week over the deal's terms.
TikTok's parent company ByteDance has sought permission from the Chinese government to export technology, Bloomberg reported Wednesday.
ByteDance filed a request with the Beijing Municipal Commerce Bureau asking for approval to export its technology under restrictions recently implemented by the Chinese government, according to Bloomberg.
ByteDance, TikTok, and the Commerce Bureau did not respond to requests for comment.
In August, China expanded its list of "forbidden and restricted technology exports" to include "personalized information recommendation services based on data analysis" — such as the algorithm that powers TikTok. That move threw a wrench in the TikTok deal by requiring the company to obtain a license from the government, effectively giving Beijing veto power over a deal.
Following the announcement of the new rules, ByteDance reportedly considered bypassing that hurdle by selling TikTok without handing over its source code, but Bloomberg's report Wednesday suggests the company wants the algorithm to be part of the deal after all.
TikTok's recommendation algorithm is its most valuable asset, and experts told Business Insider's Chris Stokel-Walker that any deal without that would leave buyers unable to replicate its magic.
Though TikTok has asserted it is an industry leader on algorithmic transparency, much of its technology remains behind closed doors, leading Trump and other US officials to claim that it poses a national security risk.
That contention has become one of several major sticking points in a proposed deal involving Oracle and Walmart, which Trump gave "preliminary" approval to earlier this week, prompting the US Commerce Department to delay its ban of the app by one week.
But Trump and the Chinese government both implied they might block the deal after confusion erupted over who would actually own the app, placing ByteDance at the center of a long-running geopolitical battle between the two countries.