This billionaire investor who tried to buy TikTok is analyzing whether Trump’s deal is legal

Frank McCourt was among the investors who sought to purchase TikTok. Christophe Simon/AFP/Getty Images via CNN Newsource

NEW YORK — Billionaire investor Frank McCourt, an early bidder for TikTok, told CNN last month he is looking into whether the White House-brokered agreement for a majority-American investor group to buy the app’s U.S. assets is legal.

While McCourt said “it’s too early to say” whether he would seek to join the ownership group or challenge the deal in court if he believes it doesn’t comply with the law, he said he believes the American public deserves more information about the agreement.

“I’ve asked and engaged some really smart people to analyze (the deal) the best they can, with the information available, because there are still missing pieces with what this all means,” McCourt said in an interview with CNN’s Terms of Service podcast on Sept. 26, days after the White House announced a proposed deal for the app to be sold to a different investor group. He said his team is investigating whether the proposed deal complies with the sale-or-ban law passed last year and whether it addresses the national security concerns behind the legislation.

This is just the latest twist in a years-long effort to remove the popular video app from the control of its China-based parent company ByteDance, over concerns that it could put U.S. user data at risk and threaten US national security. The saga has seen enforcement of the ban-or-sale law delayed multiple times as the app has become a flashpoint in U.S.-China relations.

McCourt was one of the first prominent names to bid to buy TikTok, in partnership with Shark Tank-famous investor Kevin O’Leary and Reddit co-founder Alexis Ohanian, after a law passed last year requiring the app to be sold by ByteDance or be banned in the United States. The group sought to buy TikTok without its famous algorithm and planned to rebuild it on new technology created by McCourt’s organization, Project Liberty, aiming to give users more control over how their personal data is used and monetized.

But the White House is moving forward with a proposed deal to sell the app to a different investor group expected to include Oracle, private equity firm Silver Lake, Dell CEO Michael Dell and Lachlan Murdoch’s Fox Corp. While he probes that proposal, McCourt said he isn’t giving up the goal that motivated his TikTok bid and is now looking to build technology to help people protect their data online in the age of artificial intelligence.

“Big tech platforms are scraping and accumulating our data, hyper, micro-profiling us, and now they’re not just selling us ads, but they’re manipulating us,” he said. “Our data is our personhood in a digital age … We should own ourselves and we should share what we want to share about ourselves.”

Trump signed an executive order last month affirming that the deal constitutes a “qualified divestiture” as required by the ban-or-sale law, an important procedural step to advance the app’s sale.

But much about the deal remains unknown, including the details of how the new ownership group will license the TikTok algorithm from ByteDance while still addressing the national security concerns at the heart of the sale-or-ban push. The group is expected to receive a copy of the algorithm from ByteDance as part of the deal and would retrain it on U.S. user data. Oracle will monitor how the algorithm serves content to users, according to the White House.

“At the end of the day, what’s important to me … is that the rule of law in this country still means something,” McCourt said in the interview, which took place one day after Trump signed the executive order.

CNN has reached out to the White House for a response to McCourt’s comments.

McCourt’s post-TikTok plans

McCourt’s Project Liberty is now weighing using the technology it planned to use to rebuild TikTok to create a personalized AI agent that would control where and how a user’s data is shared as they navigate the internet.

“That agent then is operating on your instructions,” McCourt said. “You just say, ‘this is what I want to achieve, this is what I’m willing to share (and) not share,’ … And you can alter that over time; you can rescind permission.”

So, for example, a user who had a conversation with an AI chatbot about an upcoming trip to the mountains could indicate that they’re willing to receive ads for snow boots based on that conversation. But they could restrict the sharing of their personal health information following a conversation about a recent doctor’s visit. And when their data is used to sell them something, McCourt said he’d like to see users take a cut of that value.

Such controls could become especially valuable given that, unlike the inferences tech platforms have been able to draw about users based on their online behavior, users tell AI chatbots personal things about themselves directly. Meta said earlier this month it would use what people tell its AI chatbot to better target them with personalized ads.

It’s an optimistic model that Project Liberty is still in the process of building, and it’s not yet clear exactly how users would access the technology. McCourt did not comment on whether the group has been in talks with any of the major AI companies, although he said he believes there will still be plenty of economic opportunity for firms who get on board with his vision for the internet.

“Think of it as a data sharing economy where the platforms can make lots of money, but the individuals who are providing the data to power these platforms can also share in that economics,” he said.

By Clare Duffy, CNN