Trump Administration Considers Forcing Tencent to Divest Gaming Stakes Amid Security Concerns

The Trump administration is actively debating whether to force Chinese tech giant Tencent to divest its ownership stakes in several major gaming companies, including Fortnite creator Epic Games, League of Legends developer Riot Games, and Finnish mobile studio Supercell, according to a Financial Times report.

The deliberations come ahead of President Trump's planned April trip to China to meet President Xi Jinping, with senior White House officials holding meetings to assess whether the investments pose a national security risk. A cabinet-level discussion scheduled for Tuesday was postponed due to scheduling conflicts.

Tencent's Gaming Empire Under Scrutiny

Tencent's gaming portfolio represents a significant portion of the global gaming market. The Chinese conglomerate 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, these three companies reach more than a billion players worldwide.

This case has been under examination by the Committee on Foreign Investment in the United States (CFIUS) since Trump's first term, making it one of the panel's longest-running investigations. CFIUS, a Treasury-led panel that reviews inbound investments for security risks, has been particularly focused on the data collection practices of these gaming platforms.

National Security Concerns Center on Data and Technology

The primary concern driving the potential forced divestiture is user data. Gaming platforms collect financial information, personal details, and chat logs from hundreds of millions of players. However, there's an added layer of complexity: 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, creating a direct link between consumer gaming technology and military applications. This connection has intensified scrutiny of Tencent's ownership stake in the company that builds this technology.

Internal Disagreements Mirror Broader Policy Debates

Attempts to resolve the case during the Biden administration ultimately failed due to disagreements between agencies. Former 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, according to former officials cited by the Financial Times.

Chris McGuire, a former Biden administration official now at the Council on Foreign Relations, told the Financial Times: "These platforms could serve as a significant intelligence collection source."

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, sparking speculation that the administration was trying to reduce friction ahead of Trump's China visit.

Industry Impact and Uncertain Future

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. The gaming industry watches closely as the outcome could reshape the landscape of international investment in technology companies.

Epic Games has not yet commented on the potential forced divestiture. The company's Unreal Engine, beyond its military applications, powers countless games and virtual experiences across multiple platforms, making any ownership change potentially disruptive to the broader gaming ecosystem.

This case represents a critical test of how the United States balances national security concerns with the realities of a globalized technology industry, where Chinese investment has become deeply embedded in many successful Western companies.