Tencent’s stake in Fortnite and League of Legends makers: How Chinese tech giant may be ‘next TikTok’

The Trump administration is reportedly debating whether Chinese tech giant Tencent should be allowed to keep its investments in some of the world’s most popular video game companies like Fortnite maker Epic Games or be forced to sell them on national security grounds. The outcome may add fresh tension to US-China relationship even as President Donald Trump prepares to meet China’s Xi Jinping in China in April.Citing several people familiar with the internal deliberations, The Financial Times reported that the Trump administration is turning its scrutiny to Tencent’s deep investments in American gaming over national security concerns – purportedly in a similar way the US forced TikTok’s Chinese parent company ByteDance to divest its US operations over data security concerns.

What gaming companies Tencent owns

Tencent holds a 28% stake in Epic Games, the North Carolina-based studio behind the globally popular title Fortnite. It fully owns Riot Games, the Los Angeles-based developer of League of Legends. It also owns Supercell, the Finnish mobile gaming company responsible for Clash of Clans — which drew US scrutiny despite being based in Europe, due to its large American user base.Together, these investments have made Tencent the world’s biggest video gaming company by revenue, the report said.

What is Washington worried about

At the heart of the debate are data and security. Gaming platforms collect vast amounts of personal information on their users — financial details, personal profiles, in-game chat logs, and behavioural data on millions of Americans, including children.“These platforms could serve as a significant intelligence collection source,” Chris McGuire, a former Biden administration official who handled technology and national security issues, now at the Council on Foreign Relations, was quoted as saying.“Clearly the biggest national security issue in the area of gaming is data privacy and security,” added Peter Harrell, a former senior White House national security official and visiting scholar at Georgetown University.

‘One of the longest running cases’

The scrutiny of Tencent’s gaming investments is one of the longest-running cases ever handled by CFIUS — the Committee on Foreign Investment in the United States, a Treasury-led panel that reviews foreign investments for national security risks, the report noted.The first Trump administration began questioning Tencent’s stakes in Epic and Riot Games years ago, with in final month in office, President Biden’s Pentagon placed Tencent on a list of companies with alleged connections to the Chinese military. Tencent has firmly denied any such ties.