Elon Musk may buy TikTok in the US: China considers this option as it threatens to ban the app
Chinese officials are considering an option for Elon Musk to become the owner of the US part of TikTok if the app fails to avoid a ban in the US.
Here's What We Know
China does not want to lose control of TikTok and believes that the app should remain in the hands of ByteDance, which is currently fighting the impending ban in a US court. However, on 10 January, the justices of the US Supreme Court ruled in favour of the law.
One of the options currently being discussed in China is that Musk could take TikTok in the US under the control of his platform X (formerly Twitter) and merge their businesses. Such a move would not only help X attract new advertisers, but also allow it to use TikTok data to develop artificial intelligence technologies through its xAI company.
In this context, the Chinese government sees a chance to improve relations with the Trump administration, which has been actively criticising TikTok in the US. Musk, who has a good reputation among Chinese officials due to his Tesla business, could be a bridge for negotiations. In addition, Musk actively supported Trump during the election campaign and has important ties to his team.
The TikTok app for iOS. Image: Bloomberg
ByteDance and TikTok have been actively fighting the ban, arguing that it violates their First Amendment rights to free speech. However, the majority of Supreme Court justices are inclined to believe that national security takes precedence, and this poses a real threat to TikTok in the US market.
If the deal with Musk goes through, TikTok in the US could be valued at $40-50 billion. However, it remains to be seen how Musk can implement such a large-scale deal, given his large financial obligations, in particular after the purchase of Twitter for $44 billion. Another intrigue is whether this will be an open tender sale or whether the US government will organise everything.
The Chinese government has an important influence on ByteDance's decisions through its "golden share" - a special stake in the company that gives Chinese officials the right to influence strategic decisions. This means that even if ByteDance wants to keep TikTok in the US, the Chinese authorities may have the final say on a possible sale of the app or other moves in its future.
Source: Bloomberg