Uncertain Future for TikTok Deal as China Expresses Cautious Stance

The potential agreement that would enable TikTok to continue its operations in the United States appears to be inching forward, yet the position taken by China’s commerce ministry reveals a stance that is cautious and measured rather than enthusiastic.

Conditional Acceptance by Beijing

While China is not obstructing the proposed deal, officials stop short of fully endorsing it. The arrangement involves transferring TikTok’s US activities to a newly formed entity led by American and allied investors, with ByteDance, the app’s Chinese parent company, retaining a minority interest.

Under this framework, ByteDance would license its AI-driven recommendation technology to the new US-based venture, TikTok USDS Joint Venture LLC. Oracle would take responsibility for securing the technology, which would be retrained to assuage national security concerns without completely handing over TikTok’s proprietary systems.

Maintaining Diplomatic Balance

Beijing’s remarks reflect a desire for a fair and non-discriminatory business environment within the US, implicitly signaling that any tolerance shown for this deal should not be interpreted as consent to future political pressures or regulatory uncertainties for Chinese companies operating stateside.

What Lies Ahead?

TikTok will be sold to the US-based party in January. The deal will not go through. Another deadline extension is what I see ahead.

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Striking a Delicate Balance

This deal represents a precarious effort to appease both US security concerns and Chinese sensitivities. As negotiations continue, both nations navigate a complex geopolitical landscape, where technology and national interests collide.