Former Treasury Secretary Steven Mnuchin reportedly raised eyebrows when he told potential investors that he would aim to rebuild the recommendation algorithm in the United States if he could buy the ailing Chinese video app TikTok. There is.
Last month, Donald Trump’s former cabinet members announced they were “forming a group” to potentially buy TikTok after House lawmakers passed a bill that would force Beijing-based parent company ByteDance to sell within six months. ” he announced that he was planning to do so. Completely banned by the United States.
Mnuchin, 61, has reportedly pitched investors on the possibility of acquiring the TikTok brand in a deal that does not involve algorithms, which are subject to strict export laws in China. The Washington Post reportedsaid a person familiar with the situation. Instead, Mnuchin will try to build his own version of the software.
The investment banker reportedly argued that rebuilding the algorithm from scratch could avoid possible attempts by the Chinese government to block a forced sale of TikTok. Additionally, Mnuchin claimed that doing so could allow the app to be purchased at a discount.
Secretary Mnuchin’s purported plan has sparked skepticism among insiders, with the development of algorithms to power popular social media apps particularly limited by the 180-day period set out in the House bill. He points out that within the time frame, it’s easier said than done.
“This is like rebuilding Facebook. That’s the mission here,” a person familiar with Mnuchin’s proposal told The Washington Post. “It cannot be completed in 180 days or even years.”
“Everyone wants to build a TikTok-level algorithm,” said Matt Perrault, a professor at the University of North Carolina and a former Facebook employee.
“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.”
Secretary Mnuchin reportedly declined to comment on the report. The Journal has contacted his firm, Liberty Strategic Capital, for comment.
TikTok’s potential valuation varies, but it’s likely to be expensive. Bloomberg Intelligence estimates that the company’s U.S. operations could be worth up to $40 billion, while other companies put the figure closer to $100 billion or more.
Secretary Mnuchin hinted at his approach in a March 14 appearance on CNBC, arguing that the TikTok app needed to be “rebuilt in America” after the acquisition.
Secretary Mnuchin said at the time, “As long as there is no technology transfer along the way, I think China will have no problem selling it.”
Mnuchin, whose company last month led a $1 billion financing for struggling New York Community Bancorp, has not yet disclosed the names of investors who may join his bid. .
However, he has reportedly held talks with cloud computing giant Oracle and former Activision-Blizzard president Bobby Kotick. Last month, the Wall Street Journal reported that Kotick had approached ByteDance about a possible deal.
TikTok argues that the House bill is a de facto ban and that the six-month deadline is too strict to successfully complete a sale, even if it intended to do so. The company has vowed to fight the bill in court if it moves forward.
TikTok did not immediately respond to a request for comment.
