Interest In Taking Majority Stake In Chinese App TikTok Expressed By US Investors

Majority stakes in the Chinese-owned social media phenomenon TikTok are being attempted to be taken up by United States based tech investors so that the app could ward off security concerns about it expressed the White House and avert any possible banning of the app as has been indicated by United States Secretary of State Mike Pompeo, said reports.

Discussions with regulators for an possible option to acquire the video app sharing company are being held by US investors led by the venture capital firms General Atlantic and Sequoia Capital, the reports claimed.

Ads have been placed on Facebook by Donald Trump’s re-election campaign in recent days in which it has been suggested that TikTok was “spying” on US users. These charges have been denied by TikTok and its Chinese owner ByteDance.

While the proposition of banning TikTok in the United States is being reviewed by the Trump administration, there is a debate going on within the administration with some factions within US state and justice departments have reportedly expressed their support in favor of banning the video sharing app. The app has gained high popularity in the US very fast – particularly among the younger population and millions of American have the app downloaded on their smartphones.

No decisions had been made on the fate of TikTok in the US, said Larry Kudlow, Donald Trump’s top economic adviser, last week. TikTok could “pull out” of the Chinese holding company and “operate as an independent American company”, Kudlow had said.

As if in response to the impending threats of being banned by the Trump administration, TikTok announced on Tuesday its plans of recruiting about 10,000 people in the US over the next three years which will be a significant increase from the present 1,400 employees that are employed by the company in the country. This year, the company tripled its workforce.

A few days prior to the latest announcement by TikTok, security concerns over data from US consumers being transferred to the Chinese government ere expressed by Senate Democratic leader, Chuck Schumer, as well as the Republican senators Tom Cotton and Josh Hawley.

House lawmakers voted 336-71 to ban TikTok from US government devices on Monday as part of a series of amendments to the National Defense Authorization Act.

And with the rise in tensions between the US and China, TikTOk has made attempts to distance itself from Beijing. Earlier this month, the company completely exited from Hong Kong, after it as banned by the Indian government in June. It is also looking out for suitable place for setting up its global headquarters outside of China. And it recently hired a Disney veteran Kevin Mayer as chief executive in the US and has intensified its lobbying efforts.

“It is young and it is early on in the monetisation process,” one potential investor reportedly told the FT. “But it is a unique asset.”

According to Sensor Tower, downloads of TikTok set an all time record for any quarter with a total download of 315 million times between January and March.

(Adapted from TheGuardian.com)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s