Former Trump Treasury Sec. Steve Mnuchin Tries To Acquire TikTok’s U.S. Business After Ban Is Passed By Congress

Former Trump Treasury Secretary Steven Mnuchin has expressed strong interest in acquiring TikTok’s U.S. operations from its Chinese parent company. 

A new federal law mandates that ByteDance, the Chinese parent company of TikTok, divest its stake in the popular video app within a year or face a ban in the U.S. However, even if ByteDance agrees to sell, it will unlikely part with its core recommendation algorithm, the critical technology behind TikTok’s success. It attracts over 170 million monthly users in the U.S. Additionally, any potential deal would require approval from the Chinese government.

In an interview with Bloomberg, Mnuchin stated that he had been in discussions with various tech companies about the possibility of reconstructing this technology under U.S. leadership. He said the social media app’s vital video recommendation technology could be replicated. 

Mnuchin acknowledged the Chinese government’s stance on not granting an export license for the algorithm. “We have sensitive technology that we don’t want to transfer to them, and they don’t want to transfer this to the U.S.,” he said.

This predicament has led to speculation that a buyer might consider acquiring TikTok‘s U.S. operations and user base while excluding the underlying technology, which would be challenging and costly to replicate. Tech giants like Meta and Alphabet have invested significant efforts over the years to create similar platforms but with varying levels of success. Mnuchin did not disclose the names of the technology companies he had been in contact with regarding the potential reconstruction of TikTok’s central technology.

TikTok filed a lawsuit against the federal government on Tuesday to block the divest-or-ban law, arguing that the legislation infringes upon the app users’ freedom of speech. Supporters of the law assert that TikTok’s connection to China through its parent company raises concerns about the Chinese government’s potential access to U.S. users’ data or their influence over content displayed on the app. TikTok and Beijing officials have consistently refuted these claims.

Earlier in March, Mnuchin revealed in an interview with CNBC that he had engaged in discussions with potential co-investors to acquire TikTok. He intended to rebuild the app in the U.S. using domestically developed technology. However, he did not provide further details at that time.

As Treasury secretary, Mnuchin played a significant role in Trump’s initial efforts to ban TikTok through an executive order issued in 2020. However, the executive order was set aside when President Joe Biden assumed office. Last month, Biden reversed course and signed the ban passed by Congress.

On Tuesday, former Google CEO Eric Schmidt mentioned that he had explored the possibility of purchasing TikTok but has since abandoned the idea. He suggested that the U.S. government would be better off regulating TikTok than resorting to a ban or subjecting the app to legal action.