Trump Administration Could Force Tencent to Exit Major US Game Studios

The Trump administration is actively debating whether to force Chinese tech giant Tencent to give up its investment stakes in several major US gaming companies.

According to a report by the Financial Times, senior White House officials have held meetings in recent weeks to assess whether Tencent's holdings in American and Finnish gaming firms pose a national security risk.

The timing is notable. President Trump is set to visit China later this month for talks with Chinese President Xi Jinping, and this issue is expected to be part of the broader conversation around US-China relations.

So, what exactly does Tencent own? Quite a lot, actually. The company has a 28% stake in Epic Games, the North Carolina-based studio behind Fortnite. It also fully owns Riot Games, the Los Angeles-based developer of League of Legends.

On the international side, its portfolio includes:

• Supercell (fully owned, Finland)

• Turtle Rock Studios (fully owned)

• Klei Entertainment (fully owned)

• Pocket Gems (38% stake)

• Minority stakes in Ubisoft, Techland, Krafton, Remedy, Paradox, and others

The concern, as per the reports, centers on data. These gaming platforms collectively hold personal data on tens of millions of American players. Chris McGuire, a former official in the Biden administration who handled security matters, put it plainly: "These platforms could serve as a significant intelligence collection source."

The Committee on Foreign Investment in the United States (CFIUS) has been investigating Tencent's gaming investments for some time now. The inquiry began under Biden, but it never reached a firm conclusion. Different agencies within CFIUS could not agree on a path forward. The Biden-era Treasury Department eventually opted to pursue data protection measures rather than push for divestiture. That decision, however, did not put the matter to rest.

According to the FT, Tencent was even "negotiating measures with the Committee on Foreign Investment in the US to mitigate Washington's security concerns" as recently as last summer.

Things escalated in January last year when the US Department of Defense added Tencent to its list of Chinese Military Companies. Tencent pushed back hard on that designation. Its spokesperson Danny Marti stated: "We are not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on our business. We will nonetheless work with the Department of Defense to address any misunderstanding."

The Trump administration has shown it is far more willing to make bold demands of foreign-owned corporations. The TikTok divestiture saga is a fresh reminder of that.

A cabinet-level meeting to discuss the Tencent matter was reportedly scheduled for Tuesday but had to be postponed due to scheduling conflicts. It is expected to be revisited soon. As of now, neither the White House, Tencent, nor Epic Games have publicly commented on the report.