In brief: After the US government forced ByteDance to divest most of TikTok to American owners, the White House has resumed the debate over whether to allow another Chinese tech giant, Tencent, to retain its international investments in video game companies. These investments have made Tencent the world's largest video game company by revenue, but some worry that it can collect personal data from US-based gamers.
A source familiar with the matter recently informed the Financial Times that top White House officials are discussing whether to force Tencent to divest its ownership stakes in American and Finnish game companies. Internal negotiations between Tencent and multiple US agencies date back to the first Trump administration, when the president threatened to ban TikTok and ultimately forced the transfer of its majority ownership to US investors.
Tencent's investments include minority and ownership stakes in the companies behind many of the most popular games in the US. The company owns all of League of Legends developer Riot Games, Finland-based Clash of Clans maker Supercell, and 28%of North Carolina-based Fortnite developer Epic Games.
The Chinese firm is also helping keep Ubisoft afloat with a $1.25 billion investment and a 25% minority stake in a subsidiary that manages Assassin's Creed, Far Cry, and Rainbow Six. Other gaming and US tech-related investments include Activision Blizzard (Call of Duty), Larian Studios (Baldur's Gate 3), FromSoftware (Elden Ring), Reddit, and Discord.
Trump and Biden administration officials fear that Tencent can collect the financial data of Americans who purchase microtransactions in free-to-play games, personal information from their accounts, and in-game chat logs. In January 2025, shortly before President Joe Biden's term ended, the Pentagon added Tencent to a list of organizations connected to China's military. While the inclusion does not constitute a ban on operating in the US like the restrictions placed on Huawei, it might cause other companies to consider whether working with Tencent invites security risks.
Tencent has been negotiating remedies that would allow it to keep its stakes since last year, likely involving assurances that player data would remain on non-Chinese servers. However, accepting them could affect how other companies weigh the risk of investments connected to China's military.
E-commerce giant Alibaba and leading electric automaker BYD also briefly ended up on the Pentagon's list of Chinese military companies. However, the Department of Defense quickly removed the entries, possibly to improve relations with the Chinese government ahead of President Trump's planned meeting with Chinese President Xi Jinping in Beijing in April.
The situation could become a repeat of ByteDance's divestiture of TikTok. After Trump threatened to ban the massively popular social network due to fears that China was using it to collect Americans' personal data, ByteDance eventually agreed to reduce its ownership of TikTok to 19.9%. Soon after, the social network expanded its data collection efforts.