The Trump White House is debating whether to allow Chinese juggernaut Tencent to maintain its ownership stake in games companies, according to a report in the Financial Times which said the subject had been discussed by senior officials in recent weeks. A Tuesday meeting of cabinet officials on the matter was postponed due to scheduling issues, the newspaper said. The matter is being considered ahead of Donald Trump’s visit to China later this month.
The report says that a long-running investigation by the Committee on Foreign Investment in the United States (CFIUS), which began under the previous Biden administration, had raised concerns over the company’s investments giving it access to data on millions of American players.
Tencent owns a 28% stake in Epic Games and owns Riot and Turtle Rock outright. Its international portfolio includes Supercell, Sumo Digital, Funcom, Klei Entertainment and Yager, with minority stakes in firms including Ubisoft (including new subsidiary Vantage Studios) Techland, Krafton, Remedy and Paradox.
Concerns over the firm’s gaming investments giving it access to a “significant intelligence collection source” lead some Biden-era officials to argue for CFIUS to force the firm to divest its investments, according to the report, but the US Treasury opted to address the issue by creating data protections.
Finnish-headquartered Supercell was specifically referenced as a risk due to its large US user base, according to the report.
The different agencies represented on the CFIUS panel weren’t able to agree on how to handle the matter, the newspaper said, although Tencent was later added to a Pentagon blacklist of companies with connections to the Chinese military. The company has denied any military connection.
The issue is now resurfacing under the Trump administration, which has been much quicker to make demands of corporations, particularly those with Chinese ownership. It compelled TikTok to divest its US operations to a new joint venture, and the most recent update to the Pentagon blacklist included ecommerce giant Alibaba and electric car firm BYD, although that document was withdrawn shortly after release without explanation.
