Steven Mnuchin, the former U.S. Treasury Secretary, has announced his intent to spearhead an investor group aimed at acquiring the social media platform TikTok. This development emerges in the wake of the U.S. House of Representatives passing legislation that could potentially lead to a ban or forced sale of the Chinese-owned app in the United States.
Mnuchin, in a conversation with CNBC's "Squawk Box," revealed his strategy to assemble a consortium of investors for the TikTok bid, emphasizing the app's significant value despite its likely unprofitability. "It's a great business and I'm going to put together a group to buy TikTok," Mnuchin stated, highlighting his belief in the platform's financial potential.
The former Treasury Secretary, who served under President Donald Trump, played a pivotal role in advocating for TikTok's sale to a U.S. entity during his tenure. Despite facing resistance within Trump's cabinet back in 2020, Mnuchin's renewed interest aligns with legislative moves aimed at addressing national security concerns associated with TikTok's Chinese ownership by ByteDance Ltd.
The House's decision to pass the bill, which garnered a 352-65 vote, underscores bipartisan apprehension regarding TikTok's current operational structure. Lawmakers fear that the app's ownership poses a threat to national security, prompting a legislative response that could enforce a divestiture of TikTok's U.S. operations to an American company.
Mnuchin's proposal includes offering existing U.S. investors in TikTok the opportunity to maintain their stakes, with a stipulation that no single entity would hold more than 10% control. However, specific details about the investor group or the financial valuation of TikTok remain undisclosed.
The endeavor to acquire TikTok is fraught with regulatory challenges, particularly given the geopolitical tensions between the U.S. and China. Mnuchin himself acknowledged the reciprocity issues, noting, "There's no way that the Chinese would ever let a U.S. company own something like this in China."
ByteDance's ownership of TikTok has been a point of contention, with the Chinese government implementing measures in 2020 to protect what it considers sensitive technology. Chinese officials have previously expressed opposition to any forced sale that would transfer TikTok into foreign hands, complicating any potential acquisition efforts.
The legislative landscape further complicates Mnuchin's ambitions, as the bill now heads to the Senate, where its fate remains uncertain. Senate Majority Leader Chuck Schumer has indicated that the measure will be subject to thorough examination, aligning with President Joe Biden's commitment to sign the bill should it pass through Congress.
TikTok, which boasts over 170 million American users, has consistently denied allegations that it could serve as a conduit for Chinese government espionage. The company maintains that it has never shared U.S. user data with Chinese authorities and has pledged to resist such requests in the future.
As Mnuchin embarks on this ambitious acquisition venture, the broader implications for U.S.-China relations and the global tech industry loom large. With TikTok at the center of an intensifying debate over digital sovereignty and national security, the outcome of Mnuchin's efforts and the legislative process will be closely watched.
