Chinese officials consider Elon Musk a potential buyer for TikTok’s US operations if the company fails to fend off the ban.
According to sources familiar with the situation, discussions on this option are ongoing as Beijing strategizes how to navigate the contentious issue with the incoming Trump administration.
While ByteDance Ltd., TikTok’s parent company, is appealing the ban with the US Supreme Court, signals from justices during the January 10 arguments suggest the law is likely to be upheld. Senior Chinese officials are debating contingency plans, including a high-profile deal involving Musk, said the sources, who requested anonymity to discuss confidential deliberations.
Although Beijing prefers that TikTok remain under ByteDance’s ownership, the possibility of Musk stepping in as a buyer holds some appeal. With Musk’s longstanding relationship with China through his Tesla ventures and his high-profile support of former President Donald Trump’s reelection campaign, the prospect of such a deal has sparked interest among Chinese officials.
Under one scenario being discussed, Musk’s X (formerly Twitter) could acquire TikTok’s US operations and integrate the platform into its ecosystem. This move could bolster X’s advertising efforts by leveraging on TikTok’s 170 million US users.
Also, Musk’s artificial intelligence company, xAI, stands to benefit from TikTok’s vast trove of user-generated data.
Musk has publicly stated his opposition to banning TikTok in the US, emphasizing the importance of free speech. In an April post on X, he wrote, “In my opinion, TikTok should not be banned in the USA, even though such a ban may benefit the X platform. Doing so would be contrary to freedom of speech and expression. It is not what America stands for.”
The potential sale of TikTok’s US operations, valued between $40 billion and $50 billion, would require approval from both the Chinese and US governments. However, Beijing’s export rules, which restrict the transfer of key software algorithms like TikTok’s recommendation engine, would play a pivotal role in any deal.
TikTok has maintained that the Chinese government’s influence is limited to Douyin Information Service Co., its China-based subsidiary, and does not extend to ByteDance’s international operations. Despite this, the ongoing negotiations highlight Beijing’s vested interest in TikTok’s future.
The looming ban stems from national security concerns raised by US lawmakers over TikTok’s ties to China. While ByteDance’s leadership has prioritized fighting the legislation, insiders acknowledge that selling TikTok’s US operations might be the only viable alternative if the ban is upheld.
Legal experts and industry analysts have pointed to the complexities of spinning off TikTok’s US operations, which would impact shareholders and require significant restructuring. Competing bidders, including high-profile investors like Frank McCourt and Kevin O’Leary, have also expressed interest in acquiring TikTok through initiatives like Project Liberty.
As the world’s richest person, Musk is well-positioned to influence US-China relations, particularly given his business interests in both countries. Tesla’s massive Shanghai factory has not only strengthened Musk’s standing in China but also demonstrated his ability to navigate the intricacies of its regulatory environment.
