Chinese language officers are evaluating a possible choice that includes Elon Musk buying the US operations of TikTok if the corporate fails to fend off a controversial ban on the short-video app, in keeping with folks conversant in the matter.
Beijing officers strongly want that TikTok stays beneath the possession of father or mother ByteDance, the folks say, and the corporate is contesting the approaching ban with an attraction to the US supreme court docket. However the justices signalled throughout arguments on 10 January that they’re more likely to uphold the regulation. Senior Chinese language officers had already begun to debate contingency plans for TikTok as a part of an expansive dialogue on learn how to work with Donald Trump’s administration, one in all which includes Musk, mentioned the folks, asking to not be recognized revealing confidential discussions.
A possible high-profile take care of one in all Trump’s closest allies holds some attraction for the Chinese language authorities, which is predicted to have some say over whether or not TikTok is in the end bought, mentioned the folks. Musk spent greater than US$250-million supporting Trump’s re-election, and has been tapped for a distinguished position in enhancing authorities effectivity after the Republican takes workplace.
Underneath one situation that’s been mentioned by the Chinese language authorities, Musk’s X — the previous Twitter — would take management of TikTok US and run the companies collectively, the folks mentioned. With greater than 170 million customers within the US, TikTok might bolster X’s efforts to draw advertisers. Musk additionally based a separate synthetic intelligence firm, xAI, that would profit from the massive quantities of information generated from TikTok.
Chinese language officers have but to achieve any agency consensus about learn how to proceed and their deliberations are nonetheless preliminary, the folks mentioned. It’s not clear how a lot ByteDance is aware of in regards to the Chinese language authorities discussions or whether or not TikTok and Musk have been concerned. It’s additionally unclear whether or not Musk, TikTok and ByteDance have held any talks in regards to the phrases of any potential deal.
Musk and his representatives didn’t reply to a request for remark. Musk posted in April that he thinks TikTok ought to stay obtainable within the US. “For my part, TikTok shouldn’t be banned within the USA, regardless that such a ban might profit the X platform,” he wrote on X. “Doing so could be opposite to freedom of speech and expression. It’s not what America stands for.”
Robust negotiations
ByteDance and TikTok representatives didn’t reply to messages looking for remark. The Our on-line world Administration of China and China’s ministry of commerce, authorities businesses that may very well be concerned in choices about TikTok’s future, additionally didn’t reply to requests for remark.
The talks in Beijing counsel that TikTok’s destiny might not be in ByteDance’s sole management, mentioned the folks. Chinese language officers recognise they may face robust negotiations with the Trump administration over tariffs, export controls and different points, and so they see the TikTok negotiations as a possible space for reconciliation, they mentioned.
The Chinese language authorities holds a so-called golden share in a ByteDance affiliate that offers it affect over the corporate’s technique and operations. TikTok maintains that the management solely applies to the China-based subsidiary Douyin Info Service, and has no bearing on ByteDance operations exterior China. Nonetheless, Beijing’s export guidelines stop Chinese language firms from promoting their software program algorithms, just like the one integral to TikTok. As a result of the Chinese language authorities must approve of a sale that features TikTok’s precious advice engine, it has a major voice in any potential deal.
Learn: TikTok proprietor ByteDance is now larger than Tencent
TikTok’s US operations may very well be valued at round $40-billion to $50-billion, Bloomberg Intelligence analysts Mandeep Singh and Damian Reimertz estimated final yr. That’s a considerable sum even for the world’s richest particular person. It’s not clear how Musk might pull off such a transaction, whether or not it will require the sale of different holdings, or whether or not the US authorities would approve. He paid $44-billion for Twitter in 2022, and remains to be paying off sizeable loans.
Musk has a optimistic fame amongst many ByteDance workers in China, in keeping with an individual conversant in the matter. He’s seen as a really profitable entrepreneur, who has expertise participating with the Chinese language authorities via his Tesla enterprise, the particular person added.
ByteDance’s leaders have repeatedly mentioned their precedence is to struggle US laws that requires the Beijing-based firm promote or shut down the US operations due to nationwide safety issues. TikTok’s attorneys have argued the laws violates free speech legal guidelines beneath the structure’s first modification.
A majority of the supreme court docket justices steered the safety issues take precedence over free speech, though they’ve but to difficulty a proper determination. President-elect Trump, who takes workplace on 20 January, has sought to delay the TikTok ban — which takes impact on 19 January — so he can work on the negotiations. He has mentioned he desires to “save” the app and there’s been hypothesis he might take last-minute motion to sidestep the ban.
On a sensible degree, spinning off TikTok’s US enterprise could be extremely complicated, affecting shareholders in China in addition to the US. Legal professionals for TikTok argued earlier than the supreme court docket that separating the US parts of the product could be “terribly tough”.
It’s unclear if US TikTok could be bought off in a aggressive course of, or if a sale could be organized by the federal government. Billionaire Frank McCourt and Shark Tank investor Kevin O’Leary are a part of a bid via Venture Liberty to accumulate TikTok, which O’Leary has mentioned he mentioned with Trump. Previously, Microsoft had sought to accumulate the enterprise, and Oracle has a deep know-how partnership with the corporate.
One various for TikTok could be to maneuver its present US prospects over to the same app — with completely different branding — to doubtlessly sidestep the ban, one of many folks mentioned. It’s not clear how efficient such a transfer could be.
Hold combating
One particular person near the corporate, who spoke on the situation of anonymity due to the sensitivity of the technique, mentioned earlier than the supreme court docket listening to that the authorized battle remains to be the main target of high executives and they’d want to maintain combating within the US somewhat than promote TikTok US and cede management for good.
Musk is able to affect the China-US relationship because the world’s richest particular person with companies that straddle the world’s two largest economies. Tesla, the place Musk is CEO, erected a sprawling manufacturing unit in Shanghai in 2019 and has since expanded the power into the corporate’s largest manufacturing base. The trouble helped Tesla develop its market share in China regardless of robust native competitors, and construct goodwill with authorities officers.
Learn: How TikTok is propelling African music into the worldwide charts
Whereas Trump is staffing his incoming administration with China hawks like secretary of state nominee Marco Rubio, Musk has spoken out towards some current China commerce insurance policies, together with the Biden administration’s tariffs on Chinese language electrical automobiles. — (c) 2025 Bloomberg LP
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