Chinese officials are considering allowing Elon Musk to take control of TikTok’s US operations if the popular short-video app fails to evade an impending ban. While Beijing wishes for ByteDance Ltd. to retain TikTok, they are exploring alternative plans amid ongoing discussions with the incoming Trump administration.
Urgency of Negotiations
These discussions have become more pressing after Supreme Court justices suggested they may support new laws requiring ByteDance to either divest or close TikTok’s US branch by January 19. One proposal being considered is merging TikTok US with Musk’s X platform, leveraging TikTok’s vast user base of over 170 million Americans to enhance X’s advertising potential.
Financial Challenges
The financial aspect is a significant hurdle, with Bloomberg Intelligence analysts estimating TikTok’s US operations to be worth between $40 billion and $50 billion. How to arrange the deal, secure funding, and obtain approval from regulators remains uncertain, particularly in light of Musk’s previous commitments from his $44 billion Twitter acquisition.
For the moment, ByteDance is concentrating on its legal challenges, arguing through TikTok’s attorneys that forcing a sale infringes on First Amendment rights. Conversely, President-elect Trump has suggested he may delay the January 19 ban to allow both parties more time to negotiate, highlighting his intention to “save” the platform.
China’s Influence
The Chinese government possesses a so-called golden share in a ByteDance subsidiary, granting it substantial influence over key business decisions, including those related to export regulations concerning TikTok’s algorithm. This arrangement guarantees that Beijing remains impactful in any potential sale, particularly regarding TikTok’s distinctive recommendation technology.
Musk has publicly opposed a TikTok ban, tweeting in April that shutting down the app would contradict fundamental principles like freedom of speech and expression, asserting that it does not represent what America stands for. So far, representatives from Musk, ByteDance, TikTok, and relevant Chinese government entities have remained silent on the matter.
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