U.S. investors are considering acquiring Chinese-owned video app TikTok to avert a ban in the country, according to reports today.
Venture capital firms General Atlantic and Sequoia Capital are presently in talks with U.S. regulators and the Treasury Department, discussing if a reinvented TikTok would float in the U.S.
The app has been accused of spying for the Chinese government, with President Trump saying lately that it could be banned in the U.S. Trump is not alone, with many factions in the U.S. government also wanting to ban the app.
If Trump is intent on purging the app from the U.S., a country where millions of people use it, he may have to invoke the International Emergency Economic Powers Act, according to national security experts.
Parent company ByteDance has always denied such activity, and even though it has moved offices into the U.S. to placate the critics, that might not be enough. This week the company said it will create 10,000 new jobs in the U.S., adding to the 1,400 employees already in the country. “These are good-paying jobs that will help us continue to build a fun and safe experience and protect our community’s privacy,” A TikTok spokesperson told CNN on Tuesday.
It’s not certain just what TikTok plans to do and it hasn’t yet publicly discussed a possible takeover, but the company has said it’s thinking about a corporate restructure or possibly opening a headquarters in the U.S. Both General Atlantic and Sequoia have yet to comment on the matter.
Trump’s main economic adviser, Larry Kudlow, said last week that no decision has been made, although he added, “I think TikTok is going to pull out of the holding company, which is China-run, and operate as an independent American company.”
How much the app is worth is anyone’s guess. In 2018, it was valued at $75 billion, but it has seen a huge rise in user numbers since then. Those numbers increased dramatically during the global COVID-19 crisis, with the number of downloads now standing at more than 2 billion.