Chinese officials are discussing the possible sale of TikTok’s American branch to Tesla company owner Elon Musk if the application cannot evade a looming restriction in the United States. The sources, cited by Bloomberg, note that while Beijing would ideally like to see the company stay in the ownership of its parent firm, ByteDance, it is thinking about taking such a step as the firm continues to face legal issues.
China Mulls Selling TikTok’s US Operations to Elon Musk Amid Ban Threats
The social media application is under immense political scrutiny and controversy primarily in America, due to its policies on security from other nations and data protection. The company is now taking the case to the US Supreme Court which will be very crucial in the future of TikTok in the country. Preliminary indication they received from the court is that the law might be implemented, which will likely bring several drastic transformations to the application we use.
That Elon Musk could buy TikTok’s American branch has caused quite a stir, especially when considering his other technology acquisitions such as Twitter. It can also explain how the entertaining possibility of the app being owned by Musk and operating independently of the Chinese government could help TikTok overcome some legal and political challenges it now faces in the US.
ByteDance on the other hand sealed itself to Booting TikTok off from it as it is still a vital tool for the company. The app has been a money-making machine and thus loose control over the firm’s operations in the United States would be a big set back. But as the prospect of a ban becomes even more immediate, it appears that Beijing may be willing to consider other ways of prolonging TikTok’s existence in the American market.
Given this state of affairs the future of tiktok in the United States remains in aibaec. While these are just rumors and the discussion regarding the possibility of a new owner is still a long way from becoming the real thing, further discussions regarding the ban and the US Supreme Court’s decision, show that the application can very soon go through significant changes.
China Considers Contingency Plans for TikTok, Including Potential Musk Deal
According to Bloomberg, the senior officials of China are already looking for backup options on the app as part of a broader debate regarding how best to deal with Trump’s presidency. One of the prospects under discussion is a large-scale agreement with Elon Musk. The idea of such a deal has been interesting for Chinese officials, despite the fact that they do not intend to make a final decision entirely, but such a decision will be made under the condition that one of Trump’s closest allies will join them.
An example which has been raised is whether Musk’s company x (formerly twitter) will acquire the control of TikTok operations in the United States. In this regard, Musk would have been in a position to effectively operate both platforms at the same time utilizing X to support TikTok’s massive followers within the United States. This would allow the two platforms to be under a single entity which perhaps can ease and simplify some of the regulatory barriers.
As currently having more than 170 million users in the United States only TikTok can be considered as a valuable asset, and its combination with X may help Musk to better develop advertising revenues. Further, as Musk has formed an AI firm called xAI, TikTok could help this company push AI capabilities forward in exchange for content creation and an overall mutually beneficial win-win for the creators, TikTok, and xAI.
But, according to sources, Beijing has not yet agreed on whether this is the best way to go. These are still very preliminary discussions, and no talks have happened between ByteDance, TikTok, or Musk in an official format. To some extent it remains unclear if these discussions will develop further into actual projects.
That is why, as the situation develops now, the future of the TikTok application in America remains uncertain. This, of course, suggests that the Chinese government has woken up to the reality of high stakes on its TikTok app’s ownership structure; however, it still remains open to debate whether a change of TikTok’s ownership will drastically alter or whether a deal with Musk is in the offing.
Musk's Position and the Complex Negotiations Over TikTok’s Future
In April 2024, Elon Musk said this about TikTok in the United States: Yes, the app spreads X in the US; however, people have to have free access to it. He said on his X account, Musk, “Though such a ban could be advantageous for X, TikTok should not be banned in the United States; such restrictions go against the principles of free speech and free speech.” But that’s not what America stands for. In some cases, he has stood for free speech regardless the facts by which it may seem to endanger his own businesses.
Punishing Twitter for its perceived transgressions antagonizes Musk’s self-avowed goal of keeping platforms open, which contrasts with his call for fewer rules governing powerful social media companies. But the details of the case of the possible banning of TikTok are far from the simple conflict of two businesses: there are many geopolitical aspects that Musk can hardly influence.
Recent negotiations in Beijing show that TikTok’s future may be no longer in the control of its owner ByteDance. As Chinese officials pursue delicate diplomacy with the Trump administration, the future of TikTok may become barter currency in a wider discussion of tariffs, export controls, and other trade considerations. Such factors make the situation seems ambiguous for both ByteDance and Musk, because China’s administration acts in terms of economic sovereignty.
In every phase of the negotiations the problems to all participants become obvious to a certain extent. For Musk, the opportunity to be involved in TikTok’s future could also present monumental challenges, especially given the tendency of the company to weigh his affirmative stance on free speech against the imperatives of Dollars-based global business and geopolitics.
China’s Influence on ByteDance and TikTok’s Future
The Chinese government also has a ‘golden share’ to one of ByteDance’s subsidiary companies hence they have a huge control over the organization. This share helps Beijing put pressure on issues concerning ByteDance’s important operational activities and more so within China. But TikTok has insisted that the government only has control over Douyin, the Chinese version and has no say with the TikTok that operates in other countries.
As it stands, by contrary to what TikTok has been saying, Beijing’s regulations on export control to an extent make it difficult for the owner to offload the app’s technology or assets. These regulations bar Chinese firms, including ByteDance, the parent company of TikTok, from selling software algorithms without theChinese government’s approval. This means that any hope to sell TikTok’s local operations or even change its ownership structure, will not be possible without China’s blessing.
Considering these limitations, Beijing plays a critical role in any decision on the company’s future, being the owner of TikTok. Even though ByteDance runs TikTok’s business outside China, the CCP controls important technological resources. This produces a rather interesting state of affairs for ByteDance, not least as it looks to balance its obligations towards not only the US government, but also its own government.
Finally, it is explicit that the Chinese social media giant has the possibility of both thriving in the United States and in the rest of the world depending on both ByteDance and the Chinese government’s actions in these high-stakes negotiations. The “golden share” gives Beijing veto power over actions that underpin TikTok’s business model and its market prospects abroad.
Valuation and Challenges of a Potential TikTok Deal
Currently, the operation of TikTok in the United States can cost between $40 billion and $50 billion according to Bloomberg Intelligence analysts. This big valuation means that the proposed divestment of TikTok’s US operations could be on par with some of the most valuable technology companies in the world. The $100 billion bet is not a joking matter even for Elon Musk who Forbes and Bloomberg ranked the richest man in the world.
As to how Musk could fund such a deal is yet unknown. Taking into account his latest buy which is Twitter worth, $44 billion in 2022, he has still plenty of debt associated with that deal. It remained unclear whether Musk would have to sell other assets to fund the TikTok acquisition or whether he could take some other kind of funding – for instance, attract more investors or obtain a loan.
In addition to the monetary challenges, the existence of political barriers with the American government as a prerequisite for the acquisition process is a big huddle. The acquisition would most probably attract a lot of attention due to national security interests mainly the firm’s linkage to China. Getting clearance for such a transaction would be a major political and regulatory hurdle owing to the size of the transaction.
While communities of TikTok users and creators continue to debate the app’s future in the United States, the platform’s future is currently up in the air. We will also see high stakes negotiations between the US and the Chinese governments besides involving Musk whereby the future of TikTok operations in the US or the future of theac deal will be expected to be defined.
