Secretary Mnuchin still considering buying TikTok, says technology can be rebuilt

Former Treasury Secretary Steven Mnuchin said Tuesday he remains “very interested” in acquiring TikTok, even if the Chinese government bans the app’s parent company, China-based ByteDance, from selling its algorithms. , suggested that the technology could be rebuilt.

“I’ve actually been talking to a number of tech companies about restructuring,” Mnuchin told Bloomberg TV. “We believe that algorithms can be rebuilt.”

“So if we were to make an acquisition, my plan would be to rebuild the technology under U.S. guidance so that everything going forward is separate from ByteDance and very robust and secure.” he said.

The move to buy the popular social media app comes in the wake of a new law signed by President Biden last month, under which ByteDance must sell TikTok within about a year or lose its U.S. network and online app store. The use of is prohibited.

However, even if ByteDance were willing to sell TikTok, it may not be allowed to sell the algorithms the app utilizes.

“The Chinese government has made it clear that they will not license the export of algorithms, and I understand that,” Mnuchin said. “We have sensitive technology that we don’t want to transfer to them, and they don’t want to transfer this to the United States.”

The former Treasury secretary also warned Tuesday that the lawsuit could derail efforts to buy apps and rebuild the technology.

“We think it’s rebuildable given the year it is,” he told CNBC’s “Squawk on the Street.” “But the problem is, if they’re going to litigate and it takes six months, that’s inevitably going to be too little time to rebuild the technology.”

TikTok and ByteDance filed a lawsuit Tuesday seeking to block the law, saying it violates the First Amendment.

It also said a “qualified sale” would be “commercially, technically and legally impossible” and could lead to the app’s closure in the U.S., cutting off millions of daily users. He claimed that there was.

“The best outcome would be for them to come to an agreement now and give us a year to rebuild the technology,” Mnuchin said. “This would be a massive effort, but I think it’s doable. ” he said.

“But my concern is that if they spend six months litigating, and then they decide to make a deal, and they only have six months left, they’re not going to build the technology in that time at all. It’s just not possible,” he added.

Secretary Mnuchin also suggested that investing in TikTok to dilute Chinese ownership may be the best approach, rather than buying the app.

“I think this is actually the best way to go because it’s currently 60% foreign owned and many of those investors want to stay,” he told CNBC. “So we don’t need to sell it completely. We just need to separate it from ByteDance, and to comply with the law, the Chinese ownership needs to be less than 20 percent.”