If a team of U.S. tech investors get their way, they will buy TikTok, China’s popular video-sharing service, as President Donald Trump lobbies to ban it.
The Financial Times reported the investors, led by Sequoia Capital, the Menlo Park, Calif., venture capital firm, and New York-based growth equity firm General Atlantic, are in talks with the U.S. Treasury Department and other regulators to see if buying TikTok would allay the White House’s concerns about the app.
The campaign to re-elect the president has taken to Facebook to ask people to sign a petition to ban TikTok. The ad refers to the app’s ability to access material stored on phone clipboards, an app that saves text messages, two sources involved in the process told the news service.
Last weekend, President Donald Trump’s election campaign placed ads on Facebook suggesting that TikTok was “spying” on U.S. users, a claim the company has denied.
Secretary of State Mike Pompeo said recently Americans who downloaded the app risked their private information falling into “the hands of the Chinese Communist Party.”
Under the terms of the sale under discussion, ByteDance, TikTok’s Beijing-based parent company, would be shielded from the app but would retain a minority stake in the international business, with non-voting shares, sources told the FT.
“This is the only viable plan,” the source said.
While other investors from New York City and tech firms from Silicon Valley have approached ByteDance and its founder, Zhang Yiming, about a potential deal for TikTok, the General Atlantic and Sequoia group has progressed further, sources said.
Larry Kudlow, Trump’s top economic adviser, said no decisions have been finalized and noted TikTok could separate from the Chinese holding company and operate independently in the U.S, the news services reported.
“Since publicly announcing two weeks ago that we are evaluating changes to the corporate structure of the TikTok business, there have been numerous suggestions made by external people not involved in the company’s internal discussions,” TikTok said. “We do not comment on rumors or speculation. We are very confident in the long-term success of TikTok and will make our plans public when we have something to announce.”
General Atlantic and Sequoia declined to comment.
Two weeks ago, Wells Fargo, citing security concerns, asked employees to remove the TikTok app from their work phones.
As questions swirl around TikTok, Facebook said it plans to roll out a similar service called Instagram Reels. The offering will have the capacity to get into Reels on the lower part of their Instagram screens.
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