The gay online dating app Grindr.

Chinese online game developer Beijing Kunlun Tech Co. Ltd. has confirmed that it is in talks with the Committee on Foreign Investment in the United States regarding a potential divestment of its U.S. subsidiary Grindr, a gay dating app.

In a filing on Monday, Shenzhen-listed Kunlun said that it is negotiating with CFIUS over its ownership of Grindr, but has not reached an agreement. Last week Reuters reported that CFIUS was concerned that Kunlun's ownership of Grinder posed national security risks.

If Kunlun does indeed end up selling Grindr, it will be a rare case of CFIUS making an investor undo a deal that has already been completed. Most of the previous objections against Chinese investments from CFIUS came before the deal closed. In one other instance, in late 2012, after receiving recommendations from CFIUS, then-President Barack Obama ordered the Chinese company Ralls Corp. to sell four wind farms it had purchased earlier that year in Oregon.

In the Ralls' case, however, CFIUS objected to the investment because one of the wind farms was located close to a military base where the U.S. Navy trains its pilots, a concern that conformed to traditional national security threats. Now, the government seems to have taken a more expansive view of national security.

Observers say the current CFIUS move demonstrates that the U.S. now views data security as a major national security threat. Grindr, which has more than 27 million users, collects personal data such as location, photos and even HIV status. CFIUS' objections suggest the government is concerned that foreign ownership of such information could enable foreign governments to use personal data as a means of influence or blackmail. Last year, Democratic Sens. Edward Markey and Richard Blumenthal wrote an open letter questioning how Grindr handles sensitive personal information.

It isn't the first time data security has played a role in destroying an investment deal. Last year, CFIUS helped kill a proposed merger between MoneyGram and the Chinese firm Ant Financial, also apparently over data privacy concerns.

Since assuming office in 2017, the Trump administration has ramped up CFIUS investigations into Chinese deals. Between 1975 and 2011, CFIUS blocked only one transaction, but has helped block five deals since 2012.

As a result, Chinese investment into the U.S. dropped to a mere $5 billion in 2018 from $45.6 billion in 2016, according to data compiled by Baker McKenzie and Rhodium Group.

Kunlun made its first investment in Grindr in 2016, a record year for Chinese overseas investment, paying $93 million for a 61.53 percent stake in the California-based company; the Chinese company bought the remainder in 2017 for another $152 million. According to Reuters, neither deal sought CFIUS clearance voluntarily.

CFIUS has not made a public announcement regarding the Grindr deal. In its past recommendations, the interagency committee, which is led by the Department of the Treasury secretary, was reluctant to elaborate beyond expressing concerns over potential national security risks.

Both of Kunlun's Grindr investments were made before the passage of the Foreign Investment Risk Review Modernization Act of 2018, known as FIRRMA. The relatively new act requires mandatory CFIUS filings for deals involving sensitive personal data of U.S. citizens.

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