BREAKING: Elon Musk Emerges As A Potential Buyer For TikTok
Tech entrepreneur Elon Musk, who purchased Twitter in 2022, is being considered by the Chinese government as a potential buyer for the wildly popular social media site. TikTok — which features short form videos and caters to a younger audience — faces a potential ban in the United States unless it is sold to an American company by July 19. A bipartisan bill to ban the social network in the U.S. easily passed in both chambers of Congress after lawmakers raised concerns about national security, data mining and a host of additional issues if the Chinese company is allowed to operate in its current form in the United States.
Bloomberg, citing multiple sources familiar with the matter, reported that Chinese government officials have considered selling TikTok’s U.S. operations to Musk if the Supreme Court does not stop the ban from going through by January 19. Parent company ByteDance is currently appealing the ban before the nation’s highest court, though justices signaled that they are likely to uphold the law during arguments on January 10. Given the situation, the Chinese government has reportedly discussed “contingency plans” for TikTok as part of a broader strategy on how to work with President-elect Trump’s Administration. One of the plans for TikTok involves Elon Musk, multiple sources told the outlet on the condition of anonymity.
The Chinese government is expected to have final say over whether the companies U.S. operations are ultimately sold. The sources added that TikTok deal involving Elon Musk — one of the President-elect’s closest allies — is very much under consideration. In one scenario, Musk’s X would take control of TikTok U.S. and run the companies together. A deal could be appealing for Musk, as the company’s 170 million U.S. users could go a long way in attracting advertisers to X after the company was targeted by coordinated boycotts due to Musk’s political activities.
Musk addresses the crowd during Trump’s return rally to Butler, Pennsylvania on October 5, 2024
Chinese officials have yet to form a consensus on how to proceed, while the sources told Bloomberg that discussions involving Elon Musk and TikTok are in preliminary stages. It is unclear whether ByteDance is aware of the Chinese government’s plans, nor is it clear whether Musk has had any discussions with the company or the Chinese government concerning a potential deal.
Musk has not yet commented on reports of a potential deal. Back in April, the tech entrepreneur stated that he does not believe TikTok should be banned in the United States. “In my opinion, TikTok should not be banned in the USA, even though such a ban may benefit the X platform,” Musk wrote in an X post at the time.“Doing so would be contrary to freedom of speech and expression. It is not what America stands for.”
According to the report, Chinese officials are preparing to navigate potentially difficult negotiations with the Trump Administration over key economic and national security goals. The president-elect has vowed to raise tariffs on Chinese goods in order to close loopholes that exporters use to sell their products at a cheaper price in the United States. Allowing Elon Musk or another U.S. company to acquire TikTok is being viewed as a potential negotiating tool as the Chinese government prepares for the new administration, the people told Bloomberg.
If confirmed, the reports could suggest that ByteDance may not be in sole control of the negotiations, the sources added. The Chinese government holds a “golden share” in a ByteDance affiliate that gives it influence over the company’s strategy and operations. The company has claimed that the control only applies to the China-based subsidiary Douyin Information Service Co., and has no effect on ByteDance operations outside China. In addition, the CCP’s export regulations prevent Chinese companies from selling their software algorithms, like the one that powers TikTok. This means that the Chinese government would need to approve of a sale that includes TikTok’s recommendation engine, the outlet noted.
TikTok’s U.S. operations could be valued anywhere between $40 billion and $50 billion, according to Bloomberg Intelligence analysts Mandeep Singh and Damian Reimertz. It is unclear whether Musk’s X would need need to join a consortium with other companies and investors in order to pull off a potential deal, while it is also unclear whether the U.S. government would approve a deal. Musk acquired Twitter — which he later rebranded to X — for $44 billion in 2022.