The Trump administration is said to be evaluating whether Tencent should be allowed to maintain its investments in American gaming firms.

      The Trump administration is currently in deep discussions regarding whether to permit Tencent to maintain its investments in US and Finnish gaming firms, as reported by Reuters. The focus of the debate is on Tencent’s stakes in Epic Games, Riot Games, and Supercell, which are associated with widely popular games like Fortnite, League of Legends, and Clash of Clans.

      According to sources familiar with the situation, US cabinet officials had originally scheduled a meeting for March 4, but it was postponed due to conflicts in scheduling. The primary concern being examined is whether Tencent's investments could pose threats to national security, especially since gaming companies manage sensitive data, including financial information, personal details, and chat logs from millions of users.

      Notably, Epic Games’ Unreal Engine is extensively utilized not only in gaming but also in film production and military simulations, which involves handling vast amounts of user data.

      Currently, Tencent owns a 28% stake in Epic Games and has full ownership of Riot Games and Supercell, with their gaming products collectively reaching over a billion players across the globe.

      The Committee on Foreign Investment in the United States (CFIUS) began its evaluation of Tencent's investments in these gaming companies during the Trump era, and this matter has become one of the agency’s longer ongoing reviews. These investments are seen as potentially involving sensitive information of a significant number of American users.

      Under the Biden administration, discrepancies surfaced among US government agencies regarding how to tackle the situation. The Justice Department leaned towards implementing stricter measures, potentially necessitating Tencent to divest some or all of its stakes, while the Treasury Department advocated for allowing the investments to remain, provided that mitigating actions like data segregation were taken.

      Due to the lack of agreement among the agencies, the review has not yet reached a resolution.

      At this point, neither Tencent nor the involved gaming companies have responded. Market analysts are increasingly concerned that any forced divestiture by the US could disrupt the global gaming supply chain and further strain the technological disconnect between China and the US.

      The outcome of this case could redefine regulations governing cross-border technology investments and may serve as a significant example of the frictions between national security issues and commercial interests in the digital age.

      Tencent’s investment chronology in these major gaming firms includes:

      Tencent started investing in Riot Games in 2008 and finalized its acquisition in 2011, making it a fully owned subsidiary. Riot Games is renowned for creating League of Legends.

      In around 2012, Tencent acquired a 28% share in Epic Games through several rounds of investment. Epic Games is known for developing Fortnite and the prevalent Unreal Engine.

      As part of a consortium led by SoftBank, Tencent obtained a substantial stake in Supercell in 2016, subsequently increasing its shares to become the majority owner. Supercell is best recognized for Clash of Clans and Clash Royale.

      Jessie Wu is a technology journalist based in Shanghai, covering consumer electronics, semiconductors, and the gaming sector for TechNode. You can reach her at jessie.wu@technode.com.