Former Treasury Secretary Steve Mnuchin Gathers Investors To Buy TikTok – Report

The future of ByteDance’s TikTok is again in the news headlines, after a report suggested a senior US figure was leading a buyout attempt of the app.

CNBC reported that former Treasury Secretary Steven Mnuchin is building an investor group to acquire ByteDance’s TikTok, whose continued existence in the US is under threat.

It come as the House of Representatives on Wednesday passed a bill that would force Beijing-based ByteDance to divest TikTok, or it would face a ban in the US.

Buyout attempt

“I think the legislation should pass and I think it should be sold,” Mnuchin, who leads Liberty Strategic Capital, reportedly told CNBC’s “Squawk Box” on Thursday.

“It’s a great business and I’m going to put together a group to buy TikTok,” he reportedly said.

There is common ground between Liberty and ByteDance, CNBC noted.

Masa Son’s SoftBank Vision Fund invested in ByteDance in 2018, and is also a limited partner in Mnuchin’s Liberty Strategic.

“This should be owned by US businesses. There’s no way that the Chinese would ever let a US company own something like this in China,” Mnuchin was quoted as saying.

Mnuchin served as Treasury secretary under former President Donald Trump.

Sale option?

It should be noted that many Western owned firms and services are, or have been banned from operating in China, or have been forced to withdraw their offerings from the Communist country, due to onerous local laws and censorship requirements.

At the time of writing, it is unclear if the Chinese government would permit ByteDance to sell TikTok to a US buyer, or if it could obtain Chinese approval within a six month period.

TikTok for its part had reacted furiously against the bill, including lobbying its US user base to directly register their protests with US lawmakers.

TikTok CEO Shou Zi Chew has implied that a sale is not an option, CNBC reported.

China Foreign Ministry spokesperson Wang Wenbin reportedly described the bipartisan push as indicative of “robber’s logic” toward TikTok, and said the vote “runs contrary to the principles of fair competition and international economic and trade rules”.

“If so-called reasons of national security can be used to arbitrarily suppress excellent companies from other countries, then there is no fairness and justice at all,” Wang was quoted as saying by the Financial Times.

“When someone sees a good thing another person has and tries to take it for themselves, this is entirely the logic of a bandit.”

ByteDance was valued at $220 billion at its last funding round in 2023, CNBC reported, citing PitchBook data.

TikTok’s CEO has previously told US lawmakers that the app has not, and would not, share US user data with the Chinese government.

Project Texas

Amid US concerns about the app in recent years, TikTok has reportedly spent more than $1.5bn on its so-called Project Texas – which is a corporate restructuring plan to safeguard US user data and content from Chinese influence.

For example TikTok partnered with US tech firm Oracle to build a standalone unit to wall off American user data.

However US lawmakers believe Project Texas does not offer sufficient protection against Chinese laws that require Chinese companies to make user data accessible to Chinese intelligence services, if requested.

Besides national security concerns, there are also privacy concerns about TikTok, due to its data gathering practices. It has been widely reported online that the app has access to a user’s mobile phone contact list, camera (permission dependent), GPS (i.e. location) data, and IP address.

TikTok is also said to externally gathers user data from third-party sources, however some argue this is not dissimilar to the data gathering practices of Meta Platforms etc.