GETTING IN ’RITHM
Mnuchin eyes AI ally to rebuild TikTok in buy bid
Steve Mnuchin is angling to partner with an AI firm that can quickly rebuild TikTok’s algorithm as he looks to orchestrate a blockbuster bid to acquire the China-owned app, The Post has learned.
The former treasury secretary first revealed last month that he was exploring a bid to buy TikTok after House lawmakers voted to pass a bill requiring its Beijing-based parent, ByteDance, to divest within six months or face a total US ban.
Now, insiders say Mnuchin is pitching a plan to rebuild TikTok’s algorithm in the US as the only likely way to satisfy congressional concerns that the app poses a national security risk, as well as China’s strict export laws that could block a sale.
The Senate is expected to hold hearings on the House bill later this year, although no vote has yet been scheduled.
Mnuchin believes that any effort to rebuild TikTok’s sophisticated algorithm would require a partner with access to advanced AI capabilities and expertise, the sources said. Given the size and complexity of the undertaking, the ex-Trump Cabinet member could partner with more than one tech firm, the sources added.
A spokesperson for Mnuchin declined to comment. TikTok did not return a request for comment.
Mnuchin has already said publicly that TikTok would need to be “rebuilt in the US” after an acquisition, arguing on CNBC that China “will be fine selling it so long as there’s not a technology transfer along the way.”
Multiple experts told The Post that Oracle — the software giant headed by billionaire Trump donor Larry Ellison — is a logical candidate to join his bid. TikTok has already committed to storing the data of US users in servers operated by Oracle as part of “Project Texas,” a plan to satisfy national security and user-privacy concerns.
Oracle did not return a request for comment.
When Mnuchin was treasury secretary, Oracle nearly bought TikTok as part of the Trump administration’s effort to force ByteDance to divest. Experts note that an Oracle deal wouldn’t likely to draw as much regulatory scrutiny as a deal with Big Tech firms like Google, Meta and Apple.
Oracle would “make sense, given how involved they’ve been in the history of this saga,” according to Tobin Marcus, a former economic adviser to then-Vice President Joe Biden during the Obama administration.
Hefty price tag
Microsoft, which is the chief investor in OpenAI, is another logical candidate. The Big Tech giant also came close to buying TikTok in 2020, with CEO Satya Nadella later remarking the aborted bid was the “strangest thing I’ve ever worked on.”
Last month, The Washington Post reported that Mnuchin has told potential partners that he was in touch with Oracle, as well as former Activision-Blizzard chief Bobby Kotick, who is also reportedly interested in buying the app.
A Kotick representative did not return a request for comment.
The app, which has more than 170 million American users, is sure to carry a hefty price tag. Bloomberg Intelligence estimated that its US business could be worth up to $40 billion, while others have put the price at $100 billion or beyond.
While some critics have blasted Mnuchin’s plan as far-fetched, rebuilding the algorithm is “really the only option” given China’s strict export controls on AI, Andrew Grotto, the former senior director for cybersecurity policy under Presidents Barack Obama and Donald Trump, said.
“I don’t think it’s easy, but I also think given the right level of resource expenditure, the sky’s the limit in some sense,” Grotto said. “Whether the product is any good or not at least as good as the original underlying algorithm of TikTok, that’s a different question. It seems like a minimally viable product is achievable.”
Rob Atkinson, president of the Information Technology and Innovation Foundation think tank and a member of TikTok’s content and safety advisory council, agreed.
“I don’t know if it’s an irreplaceable algorithm,” Atkinson said. “It seems like with all the AI capabilities today, you could get a really good algorithm that would be maybe not 100% as good, but pretty good and over time would probably evolve to where it is today, if not better. So I don’t think that would be the issue.”
Rebuilding the app would be just one challenge for Mnuchin’s bid, which would need to secure approval from both the US and Chinese governments.
The road to the Senate floor on the TikTok bill is likely to be bumpy, according to Marcus, who views a vote as unlikely before the election. Calls for a ban swelled in March 2023 after TikTok CEO Shou Chew’s disastrous testimony on Capitol Hill, only to fizzle for more than a year, he noted.
“The Senate certainly does not seem eager to just pick up the House bill and ram it through as-is, so there’s definitely a possibility to make changes,” Marcus said.
‘Huge besmirchment’
On the other side of the Pacific, critics say it’s a long shot for Mnuchin or any other potential buyer to secure the necessary approval from the Chinese government, which has repeatedly vowed to block any forced sale of TikTok.
One tech executive told The Post last month that Beijing would see it as a “huge besmirchment of their honor and integrity as a sovereign nation” if the US government got its way.
Still, the Chinese government might find it difficult to turn down a huge market-value deal for TikTok’s US operations — especially as its president, Xi Jinping, works overtime to reassure Western business leaders that the country is open for business.