Chinese officials are reportedly considering contingency plans to sell TikTok’s U.S. operations to billionaire Elon Musk, as the popular video-sharing platform faces an imminent ban under U.S. law. The discussions, described as preliminary, highlight the growing complexities in the geopolitical and business tensions surrounding TikTok’s fate.
A Forced Sale or Shutdown
TikTok’s parent company, ByteDance, has been under increasing pressure from the U.S. government to divest its U.S. operations over national security concerns. Last year, Congress passed bipartisan legislation requiring TikTok to either sell its U.S. operations or cease operations entirely. The law goes into effect on Sunday, setting a tight deadline for action.
Read More: Elon Musk’s biographer warns of mental health concerns
The U.S. government alleges that TikTok poses a significant risk due to potential data access by the Chinese government and its ability to spread propaganda. ByteDance and Chinese officials have repeatedly denied these claims, but their arguments have found little support among U.S. lawmakers or the judiciary.
TikTok has challenged the legislation in court, arguing that a forced sale violates First Amendment rights. However, during Supreme Court hearings last week, justices from both conservative and liberal wings appeared skeptical of this argument, focusing instead on national security concerns.
Musk as a Contingency Option
As the ban looms, Chinese officials are reportedly exploring the possibility of selling TikTok’s U.S. operations to Musk, the CEO of Tesla and owner of X (formerly Twitter). According to Bloomberg, one scenario under discussion would involve TikTok being integrated into X, potentially leveraging TikTok’s massive user base to enhance X’s advertising capabilities and Musk’s AI projects.
However, significant hurdles remain. ByteDance’s U.S. operations are valued at $40–50 billion—a figure that even Musk, the world’s wealthiest person, may struggle to finance without divesting other assets. Moreover, there is no indication of direct negotiations between Musk and ByteDance. TikTok has dismissed reports of a Musk acquisition as “pure fiction,” with a spokesperson reiterating the company’s focus on legal battles to challenge the forced sale.
Geopolitical and Regulatory Complexities
The potential sale is further complicated by geopolitical considerations. Beijing reportedly prefers ByteDance to retain control of TikTok, but U.S. legislative pressure has forced Chinese officials to explore alternative options. China holds a “golden share” in a ByteDance affiliate, granting it partial influence over major business decisions. Any sale of TikTok would require Chinese government approval due to export restrictions on its algorithm, a key component of its success.
Meanwhile, U.S. regulators would likely scrutinize a potential Musk acquisition, especially given concerns about monopolistic ownership and data security. Musk’s close ties to China, where Tesla operates its largest factory, could exacerbate these concerns.
Broader Implications of a Ban
A ban on TikTok in the U.S. would have far-reaching consequences, particularly for the platform’s 170 million American users and the creator economy that relies heavily on it. Observers warn that a ban could devastate small businesses and content creators who depend on TikTok for income.
Jess Maddox, a media professor, noted that while creators are resilient and may pivot to other platforms, the financial and logistical toll would be significant. Some users have already started migrating to Lemon8, another ByteDance-owned platform, as a potential alternative.
Uncertain Future for TikTok
The Biden administration has delayed enforcing the ban to allow further negotiations, but time is running out. ByteDance faces a monumental challenge in navigating U.S. and Chinese regulatory hurdles while securing a buyer acceptable to both governments.
Read More: Elon Musk brands British PM ‘evil’
For Musk, acquiring TikTok would represent a significant gamble. It would expand his influence over global social media while entangling him further in U.S.-China relations. As of now, TikTok’s future remains uncertain, with its fate hanging in the balance of geopolitical maneuvering, legal challenges, and business interests.