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Tencent reportedly negotiating agreement to retain stakes in Riot, Epic amid US national security data probe

Chinese megacorporation Tencent is reportedly in negotiations with U.S. officials for an agreement to retain its stakes in League of Legends creator Riot Games and Fortnite developer Epic Games amid a national security data probe, according to a May 6 report from Reuters.

The U.S. Committee on Foreign Investment is investigating whether Epic and Riot’s use of American consumers’ personal data presents a national security risk, sources told Reuters. 

That committee has the power to demand Tencent divest its investment in American companies, including California’s Riot and North Carolina’s Epic. But the two parties are negotiating an agreement that would allow Tencent to retain its stake in the two gaming companies even if it must exit other portfolio companies. It’s still possible that the U.S. government and Tencent don’t reach an agreement around the Riot and Epic investments, according to Reuters. Specific details of those discussions were not reported. 

Both Epic and Riot declined to comment on those negotiations in a request made by The Esports Observer, but Riot told that publication that Tencent is mostly a “hands off” owner of the company. The Committee on Foreign Investment declined to comment when contacted by Reuters.

Tencent is the sole owner of Riot, purchasing a majority stake in 2011 and the remaining shares in 2015. It also owns roughly 40 percent of Epic. 

Tencent is one of the largest companies in all of China, owning social media platform QQ and instant messenger WeChat. It’s also considered the largest video game company in the world, according to a report from Bloomberg, with significant investments in Riot, Epic, mobile developer Supercell, and gaming web app site Miniclip. It holds minority stakes in Activision Blizzard, Ubisoft, and Krafton, the parent company of PUBG Corporation.

The Committee on Foreign Investment has aggressively pursued Chinese companies that own significant stakes in U.S. technology companies over…