Officials are concerned that the sale of the U.S. operations could make China and ByteDance look weak due to pressure from the Trump administration, Reuters said, quoting three people with direct knowledge of the matter.
A ByteDance spokesman said, “The (Chinese) government never suggested we shut down TikTok in the US or any other market.”
ByteDance was in talks with several companies to sell its US operations thereafterin August that would ban unless the operations are sold to another company by September 20th. The executive order cites national security concerns that the Chinese government could use the data collected by TikTok to “track the locations of federal employees and contractors, create dossiers of personal information for extortion and conduct corporate espionage.”
The official deadline is unclear. After TikTok’s U.S. operations were reviewed by a state security agency, the president issued a second executive order setting a November 12 deadline. In press conferences, Trump has also mentioned a September 15 deadline, which he said.
TikTok and ByteDance have challenged the executive order, suing both Trump and US Secretary of Commerce Wilbur Ross over the first order. In the lawsuit, TikTok alleges Trump’s order violated the procedural clause of the fifth amendment because administration failed to give the company a chance to be heard. The lawsuit also alleges that the president acted outside his legal powers because his administration failed to provide evidence that TikTok posed a national security threat.
TikTok has announced that it will store US user data in the US with a backup in Singapore. The company also said it would not share any data with the Chinese government even if asked to.
Microsoft and Walmart, along with other companies, have been in talks with ByteDance to take over TikTok’s US operations, but a deal has not yet been announced. The deal appears to be delayed as China began restricting exports of artificial intelligence technologies. ByteDance could push a deal forward by selling TikTok’s US operations without involving the main algorithms.
The Chinese embassy in the US and the White House did not immediately respond to a request for comment.