InvestorQ : Do you thing that China will be able to dictate the sale of Tik Tok stake?
Arti Chavan made post

Do you thing that China will be able to dictate the sale of Tik Tok stake?

Answer
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Rutuja Nigam answered.
1 month ago


If a recent change in the law is anything to go by, then China will have the last word on the subject of the Tik Tok Sale. The Bytedance deal with Oracle Corp cannot go through without final Chinese approval as it is the sole authority for approving algorithm transfers.

Therefore, it will be China and not the US that will have the last word on the Bytedance / Oracle deal; as and when it actually fructifies. Larry Ellison’s Oracle has submitted a detailed proposal to Trump administration to become a technology partner in the Tik Tok app.

The deal will work out something like this. Tik Tok Global will become a US headquartered technology driven company. That should take away the fear that Trump has with respect to the parentage of the company being Chinese, although it is not clear if it will be enough.

Trump is apparently not too comfortable with the thought of Bytedance retaining majority control of Tik Tok Global; either directly or indirectly. As per China’s updated export control rules, the Chinese government has the final say over transfer of technology, algorithms etc.

Thus the case gets more complicated as the buyer is a foreign buyer in this case. Bytedance is facing public criticism in China including calls to boycott Douyin, the Chinese Tik Tok. One thing is clear; the deal is unlikely to happen unless China gives the go-ahead.