The future of TikTok’s operations in US hangs in the balance, but a new proposal has emerged in a deal put together by Chinese officials thrusting Elon Musk into the spotlight once again.
The bold contingency plan would see Musk acquire TikTok’s US operations if the embattled app fails to avert a looming ban that may come into effect on the last day of Joe Biden’s presidency.
Aside from all the geopolitical and economic implications, the deal might even go so far as to reshape the relationship between China and the United States.
For ByteDance Ltd, TikTok’s parent company, the stakes could not be higher as it desperately fights the ban with an appeal to the US Supreme Court.
But after oral arguments on January 10, the justices appear poised to uphold the legislation.
TikTok’s legal team has argued that banning the app violates American’s First Amendment’s free speech protections. However, national security concerns, underscored by the Supreme Court justices, may outweigh those arguments.
The grim outlook for TikTok has spurred Beijing officials to explore alternative options, including the involvement of Musk, who may be uniquely positioned to bridge the divide between the world’s two largest economies.
‘Senior Chinese officials had already begun to debate contingency plans for TikTok,’ sources familiar with the matter told Bloomberg.
A new proposal has emerged in a deal put together by Chinese officials thrusting Elon Musk into the spotlight once again that would see Musk acquire TikTok’s US operations
For ByteDance Ltd, TikTok’s parent company, the stakes could not be higher as it desperately fights the ban with an appeal to the US Supreme Court
One intriguing possibility involves Musk’s company, X (formerly Twitter), taking control of TikTok’s US operations.
With more than 170 million users, TikTok would provide Musk’s platform with a massive user base and a treasure trove of data – and the perfect complement to his burgeoning AI enterprise, xAI.
Such a move could help X attract advertisers while solidifying Musk’s influence across social media, artificial intelligence, and global trade.
Musk’s ties to Trump’s administration adds another layer of intrigue to the potential deal.
Having donated more than $250 million to Trump’s re-election campaign, Musk is seen as a trusted ally by the incoming administration.
It’s not clear how much ByteDance knows about the Chinese government discussions or whether TikTok and Musk have been involved. It’s also unclear whether Musk, TikTok and ByteDance have held any talks about the terms of any possible deal, Bloomberg reports.
Trump’s plan to delay TikTok’s ban until he assumes office on January 20 suggests Musk’s potential acquisition could be a strategic point of negotiation between Washington and Beijing.
Trump, who has 14.7 million followers on TikTok, also has called for the deadline to be pushed back to give him time to negotiate a ‘political resolution.’
Despite his alignment with Trump, Musk has publicly opposed banning TikTok
Sarah Baus and Tiffany Cianci, who say they area a ‘long-form educational content creator,’ livestream to TikTok outside the Supreme Court on Friday in Washington by the Supreme Court
If the ban is left in place, the law passed by bipartisan majorities in Congress and signed by President Joe Biden in April will require TikTok to ‘go dark’ on January 19.
The justices are expected to act within days, almost certainly ahead of Sunday’s deadline.
Content creators and small business owners who rely on the app are awaiting a decision with anxiety.
Despite his alignment with Trump, Musk has publicly opposed banning TikTok.
In April, he tweeted, ‘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 Chinese government’s ‘golden share’ in a ByteDance affiliate gives it significant influence over TikTok’s fate.
Export rules, particularly those concerning software algorithms, further complicate any potential sale.
ByteDance’s algorithm, which powers TikTok’s recommendation engine, is a crown jewel Beijing is unlikely to relinquish easily.
The government’s approval would be crucial for any deal, particularly one involving a high-profile figure like Musk.
Content creators and small business owners who rely on the app are awaiting a decision about the ban with anxiety
Having donated more than $250 million to Trump’s re-election campaign, Musk is seen as a trusted ally by the incoming administration
TikTok’s US operations could fetch a staggering $40 billion to $50 billion, according to Bloomberg Intelligence analysts.
While Musk’s wealth is vast with him said to be worth $420 billion, such a deal would likely necessitate significant financial maneuvering.
Complicating matters, other high-profile bidders, including billionaire Frank McCourt and Shark Tank investor Kevin O’Leary, are reportedly pursuing TikTok through a venture called Project Liberty.
Microsoft and Oracle, previous contenders for TikTok’s US business, also remain in the mix.
Whether a competitive bidding process will ensue or a government-mandated sale will be arranged remains uncertain.
Even if Musk emerges as the frontrunner, the logistical complexity of spinning off TikTok’s US operations cannot be overstated.
Lawyers for TikTok have argued that such a move would be ‘extraordinarily difficult,’ affecting shareholders and operational structures on both sides of the Pacific.
Beijing’s willingness to entertain Musk’s involvement highlights the broader geopolitical stakes.
The TikTok negotiations could become a key bargaining chip as China braces for tough talks with Trump’s administration over tariffs and export controls.
With Musk’s history of working with Chinese officials through Tesla’s operations in Shanghai, he could seen as a pragmatic choice.
If TikTok isn´t sold to an approved buyer, the federal law would prohibit app stores, such as those operated by Apple and Google, from offering the popular app. It would also bar internet hosting services from hosting TikTok.
TikTok users who already have the app on their phones will continue to have access to it.
But new users won’t be able to download the app, and existing ones will no longer be able to receive updates.
That will eventually render the app unworkable, the Justice Department has said in court filings.
U.S. officials argue that the vast amounts of user data that TikTok collects, including sensitive information on viewing habits, could fall into the hands of the Chinese government through coercion.
They also are concerned that the proprietary algorithm that fuels what users see on the app is vulnerable to manipulation by Chinese authorities, who could pressure ByteDance to shape content on the platform in a way that´s difficult to detect.
TikTok, which sued the government last year over the law, has long denied it could be used as a tool of Beijing.
