01/14/2025–|Last updated: 01/14/202500:37 (Mecca time)
Chinese authorities are considering a possible option including Elon Musk’s acquisition of TikTok’s U.S. business if the company fails to oppose the app’s controversial ban on short video clips, Bloomberg reported , citing anonymous informed sources.
According to the sources, Beijing officials strongly prefer that TikTok remain owned by parent company ByteDance Ltd., and the company is appealing the impending ban by appealing to the U.S. Supreme Court, but judges have indicated during the debates on January 10 that they are likely to support the law.
Emergency plans
Bloomberg cited unidentified sources as saying that senior Chinese officials have begun discussing contingency plans for TikTok as part of a broader discussion on how to work with the new Donald Trump administration, which includes Elon Musk .
They added that a possible high-profile deal with one of Trump’s closest allies holds some appeal for the Chinese government, which is expected to decide whether TikTok will ultimately be sold.
Under one scenario discussed by the Chinese government, Musk’s Company X (formerly Twitter) would take control of TikTok America and manage the two apps’ businesses together, the sources said.
With more than 170 million users in the United States, TikTok could bolster X’s efforts to attract advertisers, and Musk has also founded a separate artificial intelligence company, XAI, which could harness the vast amounts of data through TikTok .
The sources said Chinese officials have not yet reached a consensus on how to proceed and their discussions are still preliminary. It’s unclear how aware ByteDance is of the Chinese government’s discussions or whether TikTok and Elon Musk are involved. It’s also unclear whether Musk, TikTok and ByteDance have had discussions about the terms of a potential deal, according to Bloomberg.
Difficult negotiations
Musk said last April that he believed TikTok should remain available in the United States, and wrote on his Platform X account: “In my opinion, TikTok should not be banned in the United States, even if such a ban could benefit the platform. “X: That would be against free speech and expression. That’s not what America stands for.”
According to the sources, discussions in Beijing indicate that the fate of TikTok may no longer be under the sole control of ByteDance, and Chinese officials admit they will face difficult negotiations with the Trump administration over tariffs, export controls and other issues, and they see the TikTok negotiations as a potential area of reconciliation, as they say.
The Chinese government owns the so-called golden share in a subsidiary of ByteDance, giving it influence over the company’s strategy and operations, and TikTok confirms that control only applies to Chinese company Douyin Information Service and has no influence on the activities of ByteDance. However, Beijing’s export rules prevent Chinese companies from selling its software algorithms, such as those underpinning TikTok, and because the Chinese government must approve the sale, it has a significant voice in any potential deal.
The value of TikTok’s U.S. operations is estimated at $40 billion to $50 billion, Bloomberg Research analysts Mandeep Singh and Demian Reimertz said last year, and that’s a significant sum even for Elon Musk, the richest person in the country. world according to the American Forbes and Bloomberg lists. It is unclear how such a deal could be reached, whether it would require the sale of other properties or whether the U.S. government would approve it.
It’s worth noting that Musk acquired Twitter for $44 billion in 2022 and is still paying off large loans.