Secretary Mnuchin has suggested that these hurdles could be overcome by offering to buy the app without the export-prohibited code, effectively giving his consortium a license to use it again. They will be forced to rewrite services that were built in billions of lines of code before that was possible.
He also told potential investors that the provision could also allow them to acquire TikTok at a discount, according to two people familiar with the matter, who spoke on condition of anonymity because they were not authorized to discuss the matter. It is said that
Observers, and at least one official, said the idea was too far-fetched and suggested a lack of knowledge about how tech companies work. TikTok users have flocked to the app because it offers amazing suggestions for videos to watch, but it remains to be seen whether the Mnuchin-led version can replicate that success, or if it'll be able to replace the meta- and TikTok users who have long strived to mirror that experience. There's no guarantee that it will beat a rival like Google. within their respective apps, Instagram and YouTube.
“Everyone wants to build TikTok-level algorithms, and that's a key element of competition in technology right now,” said Matt Perrault, a professor at the University of North Carolina and former Facebook board member who studies technology policy. Told.
“All the major companies are putting a lot of money and engineering talent into this problem and are having a hard time tackling it,” Perrault said. “If Steve Mnuchin thinks he can do that and be successful when so many successful companies are struggling, good luck.”
Mnuchin, a former hedge fund manager and Hollywood producer with no experience in social media, told potential partners that bypassing TikTok's algorithm would be key to unlocking control of the world's most popular app. .
But the challenges Secretary Mnuchin will face are huge, starting with the fact that TikTok is not for sale. The House passed a bill that would require the app's China-based parent company ByteDance to sell TikTok or face a nationwide ban, but the effort has stalled in the Senate. It likely faces resistance in court.
As a digital platform, TikTok relies on a vast, interlocking network of code, and Secretary Mnuchin plans to mimic the complex infrastructure the app uses to access more than 170 million U.S. accounts. It is unknown whether
The six-month sell-off deadline (failure to do so would result in a national ban) means that Mnuchin's team has been unable to sell any of the products created by TikTok's research, development and engineering teams since the app's international launch in 2017. , they will be forced to reproduce what they have refined.
Beyond the algorithm, TikTok offers billions of videos, users, comments, and interactions. In-app utilities such as a video editor and live streaming tools. Background music and visual effects library. A system for flagging advertising, online shopping, and content that violates the rules.
“This is like rebuilding Facebook. That's the mission here,” said one of the people familiar with Mnuchin's proposal. “It cannot be completed in 180 days or even years.”
Secretary Mnuchin declined to comment through a spokesperson. But he outlined his proposal on CNBC this month, saying TikTok needs to “rebuild in America” and that “there's a lot we can do in six months.”
“I hope that a solution can be found that would allow China to sell,” Mnuchin said. “China would agree to that as long as no critical technology was transferred, but I don't think that's necessary in the United States.”
TikTok and ByteDance declined to comment.
Mnuchin has discussed his proposal with various billionaires and major corporations, including Bobby Kotick, the former head of tech giant Oracle and video game empire Activision Blizzard, the people said.
The Wall Street Journal reported earlier this month that Kotick broached the idea of acquiring TikTok during a dinner with fellow guests at an elite business conference. Kotick did not respond to requests for comment.
TikTok executives say 60% of ByteDance is owned by large foreign investors, three of whom are U.S.-based, including Susquehanna International Group, General Atlantic and Cortue Management, which own five of the company's companies. He said that the company has directors on its board of directors, which is made up of people. (The remaining 40% of his money is split between his Zhang Yiming, the company's founder, and his ByteDance employees, several thousand of whom live in the United States.)
In 2020, Secretary Mnuchin led the Trump administration's attempt to force the sale of TikTok to a revolving group of companies, first Microsoft, then Oracle and Walmart. At the time, President Trump asked the Treasury Department, led by Secretary of State Mnuchin, to give him a portion of the proceeds from the sale.
And as chairman of the Committee on Foreign Investment in the United States, a federal group that has negotiated with the company on how to address national security concerns, Mnuchin has access to private and confidential information about the company's internal affairs. was allowed. He has drawn criticism for his renewed interest in government-backed takeover plans.
After leaving the Trump administration in January 2021, Secretary Mnuchin established a private equity firm, Liberty Strategic Capital, with funding from sovereign wealth funds in Saudi Arabia and other Middle Eastern countries. If Secretary Mnuchin forms a group to buy TikTok, his own overseas ties could come under increased scrutiny.
Mnuchin's proposal will likely stall in China, said Dan Wang, a visiting fellow at the Paul Tsai China Center at Yale Law School who studies Chinese technology and policy. A “discretionary” political system that blocks agreements.
China's export control list, updated during President Trump's 2020 standoff over TikTok to prohibit the transfer of personalized recommendation software, now prevents the United States from selling computer chips to China. relies on the same style of trade regulation that it employs in order to . However, Wang said he could argue that a forced sale of TikTok would force the Chinese government to break data management regulations or enact something entirely new. “If China wants to do something, China almost always has the discretion to do so.”
Liu Pengyu, a spokesperson for the Chinese embassy in Washington, said in a statement that Beijing “continues to firmly protect the legitimate rights and interests of Chinese companies” and that the United States used “the logic of robbery” to carry out “snatching.” He said that All the good things that others have from others.
Wang said the Chinese government does not consider ByteDance to be one of its “proudest creations.” ByteDance is not a state-owned company, and its products are not state-of-the-art, reflecting technological growth. “I don't think the Chinese government will be too sad if ByteDance loses a lot of revenue and hurts private market investors, most of whom are Americans,” he said.
He added that the US ban on TikTok will likely be celebrated as a propaganda victory in China, which claims the US government is hypocritical on free speech and corporate activities. Mnuchin's involvement could further that discussion.
“What if China's highest-ranking minister orders Apple or Tesla to sell its entire business to a Chinese consortium, and this minister ends up leading the consortium in the sale,” Wang said. Told. “That would look bad not just in the eyes of the Chinese government, but in everyone's eyes.”
Tony Rom contributed to this report.
