Earlier in March, during an interview on CNBC’s “Squawk Box,” Steven Mnuchin, the former U.S. Treasury secretary, said he was putting together a team of investors who could buy TikTok within six months.
This timeline is due to a bipartisan bill, passed on March 13, that would ban TikTok unless the app is sold to a U.S. buyer within 180 days. The ban stems from concerns among some U.S. lawmakers that the Chinese government has too much control over companies and could, in turn, demand that entities like TikTok cough up huge amounts of personal data or use the platform to influence policy abroad.
So far, several rich and powerful people came forward as potential buyers. Mnuchin is one of them. But his plans already arouse a lot of skepticism.
On the one hand, TikTok – with its more than 170 million active users in the United States – is expensive. By one estimate, the app is worth $100 billion, CNN reported.
Think about how Elon Musk, one of the richest people in the world men, rushed to raise the capital necessary to buy Twitter for less than half that price.
Next, Mnuchin signals that he could bypass Chinese red tape on tech exports by rebuilding the app from scratch, the Washington Post reported.
“The app needs to be rebuilt in the United States, it needs to be American technology,” Mnuchin told CNBC.
In other words, Mnuchin wants to buy TikTok without the key ingredient that makes the app so valuable and addictive: its algorithm.
Some are very skeptical of this proposal.
Mnuchin told potential investors that buying TikTok without its code could make the app cheaper to buy, two sources familiar with Mnuchin’s speech told the Post. Yet, it is precisely what lies under the hood that has made the app so successful and capable of cultivating over a billion users worldwide.
Matt Perault, a professor at the University of North Carolina and former director of Facebook’s public policy team, told the Post that many tech companies aspire to create an algorithm like TikTok.
“All the biggest companies have invested a lot of money and invested engineering talent into solving this problem and have struggled to get there,” Perault told the Post. “If Steve Mnuchin thinks he can pull this off and succeed where many successful companies have struggled, good luck.”
Mnuchin hasn’t gone into much depth about how he plans to rebuild TikTok. He told CNBC that “a lot can be done in six months.”
Exactly what or how much that represents is unclear. But TikTok, launched internationally in 2017, certainly didn’t get to where the app is in six months.
“It’s like rebuilding Facebook — that’s the task here,” a source familiar with Mnuchin’s speech told the Post. “This cannot be done in 180 days, or even years.”
Mnuchin and a TikTok spokesperson did not respond to a request for comment sent over the weekend.
businessinsider
/cdn.vox-cdn.com/uploads/chorus_asset/file/23951328/STK015_VRG_Illo_N_Barclay_7_ethereum.jpg?w=390&resize=390,220&ssl=1)
