US investors try to buy TikTok from Chinese owner

A group of US tech investors has launched an ambitious plan to buy TikTok from its Chinese owner, as the popular short-video app tries to escape being banned by the White House.

The investors, led by the venture capital firms General Atlantic and Sequoia Capital, are in discussions with the US Treasury and other regulators to see if spinning out TikTok and firewalling it from its Chinese parent would satisfy US concerns about the app, according to two people involved in the process.

Last weekend, President Donald Trump’s election campaign placed ads on Facebook suggesting that TikTok was “spying” on US users, a claim the company has denied. Other critics have noted the app’s huge influence as it sits on the mobile phones of tens of millions of Americans.

After the buyout, ByteDance, the Beijing-headquartered company that currently owns TikTok as well as its mainland Chinese sister app, Douyin, would retain a minority stake in the international business, with nonvoting shares, according to one of the people involved.

“This is the only viable plan,” the person said. The Information first reported some of the details of the buyout talks.

Other investors, including New York-based private equity firms and Silicon Valley tech firms, have also made approaches to ByteDance and its founder, Zhang Yiming, about a potential deal for TikTok.

But none is as far advanced as the General Atlantic and Sequoia group, according to the people involved. ByteDance was reluctant to share its technology with a rival company, added one of the investors.

There were several hurdles before a carve-out could take place, noted one adviser familiar with TikTok’s situation. The White House is currently reviewing whether to take action against TikTok, including whether to put it on a banned entity list that would cripple its business. There were hardcore factions in the state department and the justice department that want it banned, the adviser said.