At a time when TikTok is facing the possibility of a ban in the US, the Chinese government is reportedly considering an unexpected contingency plan. According to a Bloomberg report, Chinese officials have begun discussing the prospect of Elon Musk acquiring TikTok’s operations in the US if ByteDance, its parent company, is unable to prevent the app’s prohibition from the country.
This stems from a US law that is set to take effect on January 19 and mandates that ByteDance divest TikTok’s US operations or face a nationwide ban. The law itself was signed by President Joe Biden, seeks to address national security concerns over TikTok’s Chinese ownership, even as lawmakers in the US urged for an extension on the deadline. ByteDance has contested the law, arguing before the U.S. Supreme Court that it violates the First Amendment rights of TikTok’s 170 million American users. If the Supreme Court upholds the law, TikTok would be barred from US app stores, and internet service providers supporting the app would face penalties.
This is where the possible lifeline comes in, and according to media reports, Chinese officials have floated the idea of Musk acquiring TikTok’s U.S. business through his social media platform X, formerly known as Twitter. This plan is part of broader discussions within Beijing about managing relations with the incoming administration of President-elect Donald Trump, who has signaled an interest in negotiating a resolution for TikTok’s U.S. operations. If the talks go through, then it would benefit Musk (and X) as well, as they will be able to leverage TikTok’s existing user base.
However, the financial aspects of such a development may be an obstacle. TikTok’s U.S. business is estimated to be worth $40 billion to $50 billion, making it a substantial investment, even for Musk, who already committed $44 billion to acquire the erstwhile Twitter in 2022.
Currently, the Chinese government holds a “golden share” in a ByteDance affiliate, granting it a degree of control over the company’s decisions. While ByteDance maintains that this influence is limited to its Chinese subsidiary, Douyin, critics in the U.S. argue that Beijing’s involvement in ByteDance poses a significant security risk. According to Bloomberg, Beijing prefers for TikTok to remain under ByteDance’s ownership. For its part, TikTok has denied the possible divestiture, and a representative for TikTok dismissed reports on the matter as “pure fiction.” Musk himself has not commented on the matter.
