A kooky TikTok takeover plan
Steven Mnuchin's big idea: Rebuild the video app from scratch.
Full story: Inside Mnuchin’s far-fetched plan to rebuild TikTok from scratch
Former treasury secretary Steven Mnuchin is telling rich investors he has a plan to take over TikTok: rebuild the wildly popular video app from scratch.
The investment banker who served under President Donald Trump has told potential backers that he aims to maneuver around two giant obstacles facing those vying for the platform: its estimated price tag of more than $100 billion — far beyond what most suitors, including Mnuchin, could afford — and the Chinese government’s ban of the export of recommendation algorithms, TikTok’s secret sauce.
Mnuchin has indicated that he could overcome those hurdles by offering to buy the app without the export-blocked code, essentially forcing his consortium to remake a service built on billions of lines of code before it could be usable again.
He has told prospective investors that the provision might even let them get TikTok at a discount, according to two people familiar with the pitch who spoke on the condition of anonymity because they were not authorized to discuss it.
Observers, and at least one person familiar with the pitch, have said the idea is so far-fetched that it suggests a lack of familiarity with how tech companies work. TikTok users flocked to the app because of its surprising suggestions for videos they might like to watch, and there’s no guarantee any Mnuchin-driven version could duplicate that success — or beat rivals like Meta and Google, which have worked for years to mirror the experience within their own respective apps, Instagram and YouTube.
“Everyone wants to build a TikTok-level algorithm. That’s a key element of competition in the tech sector right now,” said Matt Perault, a University of North Carolina professor and former Facebook director who studies technology policy.
“All the biggest companies have thrown a lot of money and engineering talent at that issue and have struggled to do it,” Perault said. “If Steve Mnuchin thinks he can do that and succeed where a lot of successful companies have struggled, good luck.”
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