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US-China tensions

TikTok parent will obey China export curb, despite risk to US sale

Deal faces crucial delay as Beijing aims to protect domestic tech

China's new export curbs cast a shadow on TikTok's future in the U.S.   © Reuters

SHANGHAI -- TikTok operator ByteDance has pledged to abide by new Chinese regulations on technology exports, even as the restrictions threaten to delay the sale of the video-sharing app in the U.S.

ByteDance is negotiating to sell TikTok's operations covering the U.S., Canada, New Zealand and Australia. The suitors include Oracle and a joint effort by Microsoft and Walmart. The Chinese parent faces a deadline from Washington to divest TikTok's American operations.

ByteDance could announce its pick as early as Tuesday, CNBC reports, though any deal could face major delays in light of the new Chinese regulations.

China on Friday added several artificial intelligence technologies, including "personalized content recommendations based on data analysis," to its export control list, implying they also could be used for military purposes and that their sale overseas will be restricted. TikTok uses such technologies to recommend new videos to its users.

The change is intended to delay the sale of TikTok, and is not an outright ban, Bloomberg reported a source as saying. But the necessary screening by Chinese authorities could take time, and the deal might be delayed until after the U.S. presidential election Nov. 3.

President Donald Trump has accused TikTok of funneling personal data from its users to the Chinese government, and ordered ByteDance to sell the app's U.S. operations by Nov. 12 or be shut down in the country.

China's recent move could be an attempt to protect its technology companies from growing pushback, like that suffered by telecommunications equipment maker Huawei Technologies. The change also could exacerbate diplomatic tensions between Beijing and Washington.

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