Former Treasury Secretary Steven Mnuchin has reportedly raised eyebrows by telling potential investors that he would seek to rebuild TikTok’s suggestion algorithm in the US if he is ready to buy the embattled China-owned video app.
Last month, Donald Trump’s ex-cabinet member revealed that he was going to “put together a gaggle” to potentially buy TikTok after House lawmakers passed a bill that might force its Beijing-based parent company, ByteDance, to sell inside six months or face a complete US ban.
Mnuchin, 61, has reportedly pitched investors on the potential for buying the TikTok brand in a deal that wouldn’t include its algorithm, which is subject to strict export laws in China, the Washington Post reported, citing sources acquainted with the situation. As a substitute, Mnuchin would attempt to construct his own version of the software.
The investment banker has reportedly argued that rebuilding the algorithm from the bottom up would potentially circumvent a possible attempt by the Chinese government to block a forced sale of TikTok. Moreover, Mnuchin has asserted that doing so could allow him to buy the app at a reduction.
Mnuchin’s purported plan has drawn skepticism amongst insiders who indicate that the creation of algorithms for power popular social media apps is much more easily said than done — especially throughout the 180-day window stipulated by the House’s bill.
“That is like rebuilding Facebook — that’s the duty here,” a source with knowledge of Mnuchin’s pitch told the Washington Post. “It will possibly’t be done in 180 days — and even years.”
Matt Perault, a University of North Carolina professor and former Facebook worker, told the outlet that “everyone wants to construct a TikTok-level algorithm.”
“All the largest corporations have thrown lots of money and engineering talent at that issue and have struggled to do it,” Perault said. “If Steve Mnuchin thinks he can do this and succeed where lots of successful corporations have struggled, good luck.”
Mnuchin reportedly declined to comment on the report. The Post has reached out to his firm, Liberty Strategic Capital, for comment.
Estimates on TikTok’s potential valuation vary, but the value can be steep. Bloomberg Intelligence estimated that its US business might be value up to $40 billion, while others have placed the number close to $100 billion or beyond.
Mnuchin hinted at his approach during a March 14 appearance on CNBC, when he asserted that the TikTok app would wish to be “rebuilt in the US” after an acquisition.
“I feel the Chinese will likely be nice selling it as long as there’s not a technology transfer along the way in which,” Mnuchin said on the time.
Mnuchin, whose firm led the $1 billion capital raise for struggling Latest York Community Bancorp last month, has yet to name any potential investors who could join his bid.
Nevertheless, he has reportedly had discussions with cloud-computing giant Oracle in addition to former Activision-Blizzard boss Bobby Kotick. Last month, the Wall Street Journal reported that Kotick had approached ByteDance a few potential deal.
TikTok has argued the House bill is a de facto ban and that its six-month timeline is simply too tight to successfully complete a sale — even when it were inclined to sell. The corporate has vowed to fight the laws in court if it proceeds.
TikTok didn’t immediately return a request for comment.