Taiwanese officials are evaluating a possible solution that involves , Elon Musk , acquiring the , U. S.  , functions of TikTok if the corporation fails to fight off a controversial restrictions on the short-video game, according to people familiar with the matter.
Beijing , officials strongly prefer that TikTok remains under the ownership of parent , ByteDance Ltd., the people say, and the company is contesting the impending ban with an appeal to the , U. S. Supreme Court. But the justices signaled during arguments on , Jan. 10 , that they are likely to uphold the law.
According to the people, senior Chinese officials had already started deliberating on possible alternatives to working with Donald Trump’s administration, one of which involved Musk, as part of an in-depth discussion on how to work with him. They asked not to be identified, revealing confidential conversations that had already already taken place.
The Chinese government, which is expected to have a say in whether TikTok is ultimately sold, is in some need of a major deal with one of Trump’s closest allies, according to the people. After the Republican government takes office, Musk has been tapped for a significant role in improving efficiency because he spent more than$ 250 million in favor of Trump’s re-election.
Under one scenario that’s been discussed by the Chinese government, Musk’s X— the former Twitter — would take control of TikTok , U. S.  , and run the businesses together, the people said. With more than 170 million users in the , U. S., TikTok could bolster X’s efforts to attract advertisers. Additionally, Musk established a separate artificial intelligence business, xAI, to benefit from TikTok’s enormous data.
The people claimed that Chinese officials are still in their early stages of negotiations and have not yet reached a definitive decision on how to proceed. How well-versed in the discussions with the Chinese government is it, or whether TikTok and Musk have been involved? Additionally, it’s not clear whether Musk, TikTok, or ByteDance have spoken to anyone about the terms of any potential agreement.
A request for comment was not received by Musk and his supporters. Musk posted in April that he thinks TikTok should remain available in the , U. S.  ,” In my opinion, TikTok should not be banned in the , USA, even though such a ban may benefit the X platform”, he wrote on X. Doing so would be infringe on the right to free speech and expression. It is not what America is attempting to achieve.
Reps for ByteDance and TikTok did not respond to requests for comment.  , The Cyberspace Administration of China , and China ‘s , Ministry of Commerce, government agencies that could be involved in decisions about TikTok’s future, also didn’t respond to requests for comment.
The talks in , Beijing , suggest that TikTok’s fate may no longer be in ByteDance’s sole control, said the people. Chinese officials acknowledge that they will have to go through difficult negotiations with the Trump administration regarding tariffs, export restrictions, and other issues, and they see the TikTok negotiations as a potential source of reconciliation, they said.
The Chinese government has a’golden share’ in a ByteDance affiliate, which gives it control over the company’s strategy and operations. TikTok maintains that the control only applies to the , China-based subsidiary , Douyin Information Service Co., and has no bearing on ByteDance operations outside , China. Still, Beijing’s export rules prevent Chinese companies from selling their software algorithms, like the one integral to TikTok. It has a significant role in any potential deal because the Chinese government would need to approve a sale that includes TikTok’s valuable recommendation engine.
TikTok ‘s , U. S.  , operations could be valued at around$ 40 billion to$ 50 billion, Bloomberg Intelligence analysts  , Mandeep Singh , and , Damian Reimertz , estimated last year. That’s a substantial sum even for the world’s richest person. It’s not clear how Musk could pull off such a transaction, whether it would require the sale of other holdings, or whether the , U. S.  , government would approve. He paid$ 44 billion for Twitter in 2022, and is still paying off sizable loans.
According to a source with knowledge of the situation, Musk has a good reputation among ByteDance employees in Beijing. He is seen as a very successful entrepreneur, who has experience engaging with the Chinese government through his , Tesla Inc.  , business, the person added.
ByteDance’s leaders have repeatedly said their priority is to fight , U. S.  , legislation that requires the , Beijing-based company sell or shut down the , U. S.  , operations because of national security concerns. TikTok’s lawyers have argued the legislation violates free speech laws under the Constitution’s First Amendment.
Although they haven’t yet rendered a formal decision, the majority of the Supreme Court justices concurred that security issues should be prioritized over free speech. President-elect Trump, who takes office , Jan. 20, has sought to delay the TikTok ban — which takes effect , Jan. 19 , — so he can work on the negotiations. He has stated that he wants to” save” the app, and there is rumors that he might act at the last minute to avoid the ban.
On a practical level, spinning off TikTok ‘s , U. S.  , business would be highly complex, affecting shareholders in , China , as well as the , U. S.  , Lawyers for TikTok argued before the Supreme Court that separating the , U. S.  , portions of the product would be “extraordinarily difficult”.
It’s unclear if , U. S.  , TikTok would be sold off in a competitive process, or if a sale would be arranged by the government. Billionaire , Frank McCourt , and” Shark Tank” investor KevinO’Leary are part of a bid through Project Liberty to acquire TikTok, whichO’Leary has said he discussed with Trump. In the past,  , Microsoft Corp.  , had sought to acquire the business, and , Oracle Corp.  , has a deep technology partnership with the company.
One alternative for TikTok would be to move its existing , U. S.  , customers over to a similar app — with different branding — to potentially sidestep the ban, one of the people said. How successful such a move would be is unclear.
One person close to the company, who spoke on the condition of anonymity because of the sensitivity of the strategy, said before the Supreme Court hearing that the legal battle is still the focus of top executives and they would prefer to keep fighting in the , U. S.  , rather than sell TikTok , U. S.  , and cede control for good.
Musk is in a position to influence the , China-U. S.  , relationship as the world’s richest person with businesses that straddle the world’s two largest economies.  , Tesla, where Musk is chief executive officer, erected a sprawling factory in , Shanghai , in 2019 and has since expanded the facility into the company’s largest production base. The effort helped , Tesla , expand its market share in , China , despite tough local competition, and build goodwill with government officials.
While Trump is staffing his incoming administration with , China , hawks like Secretary of State nominee , Marco Rubio, Musk has spoken out against some recent , China , trade policies, including the Biden administration’s tariffs on Chinese electric vehicles.
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