The Trump administration is debating whether to force Chinese tech giant Tencent to divest its stakes in major gaming companies like Epic Games, Riot Games, and Supercell over national security concerns. These concerns center on the vast user data collected by these platforms and the fact that Epic's Unreal Engine is used in U.S. military simulations.
The review by the Committee on Foreign Investment in the United States (CFIUS) has been ongoing for years, spanning both the Trump and Biden administrations, without resolution due to internal disagreements on how to proceed. The Pentagon's recent designation of Tencent as an alleged Chinese military company has further heightened scrutiny ahead of a planned U.S.-China summit.
It remains unclear whether the administration will ultimately demand divestment or allow Tencent to retain its investments with added security conditions.
Main topics: U.S. national security review of Tencent's gaming investments, data privacy and military technology concerns, inter-agency and cross-administration deliberations, geopolitical timing ahead of a U.S.-China summit.
Trump administration weighs forcing China's Tencent to sell its stakes in Epic Games, Riot Games, and Supercell — meetings held over security risk ahead of China summit with Xi Jinping
The CFIUS review has dragged on across two administrations without a resolution.
Get Tom's Hardware's best news and in-depth reviews, straight to your inbox.
You are now subscribed
Your newsletter sign-up was successful
The Trump administration is actively debating whether to allow Chinese tech giant Tencent to keep its ownership stakes in several major gaming companies, including Fortnite creator Epic Games, League of Legends developer Riot Games, and Finnish mobile studio Supercell, the Financial Times reported today.
Senior White House officials are said to have held meetings to assess whether the investments pose a national security risk ahead of President Trump's planned April trip to China to meet President Xi Jinping. A cabinet-level discussion scheduled for Tuesday was postponed due to scheduling conflicts, the report said.
Tencent holds a 28% stake in Epic Games, fully owns Riot Games, and has a controlling stake in Supercell, the studio behind Clash of Clans. Together, those three companies reach more than a billion players worldwide. The Committee on Foreign Investment in the United States (CFIUS), a Treasury-led panel that reviews inbound investments for security risks, has been examining Tencent's gaming holdings since Trump's first term, making it one of the panel's longest-running cases.
It’ll come as no surprise that the Committee’s main concern is user data. Gaming platforms collect financial information, personal details, and chat logs from hundreds of millions of players, but there’s the added kicker that Epic's Unreal Engine is widely used in Western military simulation and training by defense contractors and armed forces. The U.S. Army has worked directly with Epic for years on early versions of the engine, so Tencent's ownership stake in the company that builds that technology has added to the scrutiny.
Attempts were made to resolve the case by the Biden administration, but disagreements between agencies meant that it never happened. Then-Deputy Attorney General Lisa Monaco pushed for CFIUS to force Tencent to divest its gaming companies, while the Treasury Department preferred allowing the investments to remain under data-protection mitigation measures, the FT reports, citing former officials. "These platforms could serve as a significant intelligence collection source," Chris McGuire, a former Biden administration official now at the Council on Foreign Relations, told the Financial Times.
The Pentagon added Tencent to its list of alleged Chinese military companies in January 2025, a designation Tencent called a mistake and denied. More recently, in mid-February, the Pentagon briefly published an updated list adding Alibaba and BYD before pulling it within an hour, a move that sparked speculation the administration was trying to reduce friction ahead of Trump's China visit.
Sources familiar with the matter cautioned that it remained unclear whether the administration would push for forced divestitures or allow Tencent to keep its investments with conditions. Tom’s Hardware has contacted Epic Games for comment.
Get Tom's Hardware's best news and in-depth reviews, straight to your inbox.
Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.
Luke James is a freelance writer and journalist. Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory.
-
Notton Personally, I don't care either way, so long as some US billionaire isn't allowed to buy the sold off stakes.Reply
If such a deal were to happen, I would assume it would most likely go to Bezos/Amazon Luna, although Thiel/Palantir would be my second guess. -
hotaru251 ngl if i was tencent...i'd take the most high def photo of my middle finger and mail it to them on exquisite parchment.Reply
riot especially is entirely owned by them... asking em to sell it would be like asking MS to sell off every gaming IP due to national security risk.
edit: also if it does happen expect quality of games to go down as no other company is going to invest $ into them like tencent does (becasue they make so much via other places)
Meridiano
