TikTok has chosen a bidder for its U.S., New Zealand and Australian businesses, and it could announce the deal as soon as Tuesday, according to people familiar with the situation.
However, even though TikTok has selected a bidder, the deal could be slowed or derailed by the Chinese government, which updated its technology export list on Friday to include artificial intelligence technology used by TikTok. TikTok's Chinese parent company, Bytedance, said over the weekend that it would need a license from the Chinese government before it can sell to a U.S. company.
Walmart emerged as a surprise contender last week, saying the social media app would augment its e-commerce efforts.
Walmart originally sought to be the majority owner in the deal in a consortium including Alphabet and SoftBank. But the U.S. government, which said it will ban TikTok in the U.S. if it doesn't sell to a U.S. company by Sept. 20, wanted a tech company to lead the deal, according to sources familiar with the matter. Alphabet and SoftBank then dropped out, and Walmart partnered with Microsoft on the bid. In that scenario, Walmart would be a minority owner of TikTok.
TikTok's CEO Kevin Mayer resigned last week as the deal neared its close, after just a few months on the job. TikTok executive Vanessa Pappas was named interim boss. Pappas told CNBC in an interview on Friday that she saw synergies with Walmart thanks to new e-commerce tools inside the TikTok app.
Representatives for Microsoft, Walmart and TikTok declined to comment.
--CNBC's Melissa Repko contributed to this report.