Mnuchin believes the TikTok algorithm could be rebuilt if he bought it

(Bloomberg) — Steven Mnuchin, the former U.S. Treasury secretary, said he is still interested in buying TikTok’s U.S. operation from its Chinese owner and believes the social media app’s critical video recommendation technology could be replicated.

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“I’ve actually talked to a lot of technology companies about working to rebuild this,” Mnuchin said Tuesday in an interview with Bloomberg Television. “I believe the algorithms could be rebuilt. So my plan, if we bought it, would be to rebuild the technology under US leadership, make sure everything is disconnected from ByteDance going forward, and that it’s very robust and secure.”

A federal law passed in the U.S. last month requires TikTok’s Chinese parent company, ByteDance Ltd., to sell its stake in the popular video app within a year or face being banned from the country. Even if it agreed to divest — which ByteDance has said it won’t do — the company is unlikely to sell its core recommendation algorithm, the key technology that has made TikTok a success and boosted the app to more than 170 million users in the U.S. . one month. The Chinese government would also have to sign any such agreement.

“The Chinese government has made it very clear that they will not grant an export license for the algorithm and I understand that,” Mnuchin said. “We have sensitive technology that we don’t want to transfer to them, and they don’t want to transfer it to the US.”

This conundrum has caused some to speculate that a buyer might want to acquire TikTok’s American operations and users — but not the technology underpinning the app, which would be incredibly difficult and expensive to duplicate. Tech leaders like Meta Platforms Inc. and Alphabet Inc. have spent years trying to create similar experiences, with varying degrees of success. Mnuchin did not identify the technology companies he has spoken to about potentially rebuilding TikTok’s core technology.

Read more: Schmidt says he considered buying TikTok from its Chinese owner

TikTok on Tuesday sued the U.S. government in an attempt to block the divestment or ban law, claiming the legislation stifles free speech for the app’s users. Supporters of the law say TikTok’s ties to China through its parent company open up the possibility for that country’s government to access U.S. users’ data or influence what appears in their feeds — an assertion that TikTok and the authorities in Beijing have consistently rejected it.

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In March, Mnuchin told CNBC that he had spoken to potential co-investors about acquiring TikTok with the intention of remaking the app in the US with local technology. He did not provide additional details at the time.

Mnuchin played a key role in President Donald Trump’s initial efforts to ban the app through a 2020 executive order. As Treasury secretary, he was involved in discussions about what a breakup of ByteDance would look like at the time. When President Joe Biden took office, that executive order was later set aside.

Eric Schmidt, the former CEO of Google, said on Tuesday that he explored a possible purchase of TikTok but abandoned the idea. He said it would be better for the US government to regulate TikTok rather than ban it or leave the app subject to legal action.

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