China may sell the American division of TikTok to Musk: what attracts Beijing to this option
Chinese officials are considering selling Elon Musk's American unit of TikTok if ByteDance fails to fight the ban in court.
Chinese officials are considering selling Elon Musk's American unit of TikTok if ByteDance fails to fight the ban in court.
This is reported by Bloomberg, citing its own sources.
Beijing officials have insisted that TikTok remain under the ownership of its parent company, ByteDance Ltd., and the company is challenging the impending ban by filing an appeal with the U.S. Supreme Court. But the justices made it clear during their deliberations on Jan. 10 that they are likely to uphold the law. Senior Chinese officials have already begun discussing contingency plans for TikTok as part of a broader discussion about how to work with the Trump administration, which includes Musk, the people said, speaking on condition of anonymity.
For reference
The Chinese government owns a so-called “golden share” in a subsidiary of ByteDance, giving it the ability to influence the company’s strategy and operations. TikTok says the control extends only to its Chinese subsidiary, Douyin Information Service Co., and has nothing to do with ByteDance’s operations outside China. But Beijing’s export rules prevent Chinese companies from selling their software algorithms, such as the one that is an integral part of TikTok. Because the Chinese government must approve a sale that includes TikTok’s valuable recommendation engine, it has significant influence over any potential deal.
A potentially high-profile deal with one of Trump’s closest allies has some appeal to the Chinese government, which would have some influence over whether TikTok is ultimately sold, the people said. Musk spent more than $250 million to support Trump’s reelection bid and has been tipped to play a major role in making the government more efficient once the Republican takes office.
One scenario being discussed by the Chinese government would see Elon Musk’s company X — formerly Twitter — take control of TikTok US and run the business together, the people said. With more than 170 million users in the US, TikTok could bolster X’s efforts to attract advertisers. Musk has also founded a separate artificial intelligence company, xAI, that could tap into the vast amounts of data generated by TikTok.
Chinese officials have yet to reach a firm consensus on how to proceed, the people said, and their discussions are still preliminary. It is unclear how much ByteDance is aware of the discussions within the Chinese government or whether TikTok and Musk are involved in them. It is also unclear whether Musk, TikTok and ByteDance have discussed the terms of any potential deal.
Musk and his representatives did not respond to Bloomberg’s request for comment. In April, Musk wrote that he believed TikTok should remain available in the United States. “In my opinion, TikTok should not be banned in the United States, even if such a ban could benefit the X platform,” he wrote on X. “That would be against freedom of speech and expression. That is not what America stands for.”
Representatives for ByteDance and TikTok also did not respond to messages seeking comment. The Cyberspace Administration of China and the Ministry of Commerce, government agencies that may be involved in making decisions about TikTok’s future, also did not respond to requests for comment.
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