Before ban: China allegedly examines sale of TikTok's US business to Elon Musk
Two years ago, Elon Musk bought Twitter, an influential social network. The results are mixed. The next one could possibly follow soon.
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Shortly before the increasingly likely ban on TikTok in the US, Chinese government circles were allegedly also discussing the sale of the video platform's US business to Elon Musk. This was reported by the financial news agency Bloomberg, citing anonymous people who were aware of the confidential discussions. The operator of TikTok has already rejected the report as “pure fiction”, but according to Bloomberg, ByteDance does not necessarily have to be aware of it. China's leadership would have to agree to a deal and therefore has enormous influence. The fate of TikTok in the USA could no longer be in ByteDance's hands, writes Bloomberg.
Advantages for both sides?
According to the report, the sale to Musk, who already owns an influential social network with X, is just one of several options being discussed in China. Because the multi-billionaire has recently become one of the closest confidants of the next US President Donald Trump, this has “a certain appeal”. However, Bloomberg does not go into any other details. According to the report, X has been considering taking control of TikTok in the US and could be responsible for both businesses. This would be interesting for the short messaging service because it could bring back lost advertising customers. Musk's AI company xAI could also benefit from TikTok's immense wealth of data.
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While ByteDance has already vigorously denied the report to the US magazine Variety, neither Musk himself nor the Chinese leadership have commented on it. According to Bloomberg, the value of TikTok's US business is estimated at 40 to 50 billion US dollars, and even if Musk has significantly more money on paper, it is unclear whether and how he could actually raise the funds. The majority of his assets are not directly available in shares in his electric car company Tesla. The report also states that many ByteDance employees in China view Musk positively. He is considered a successful businessman who has experience with the Chinese leadership.
Meanwhile, time is running out for ByteDance and TikTok. A current law gives the Chinese company a deadline of January 19 to divest itself of the US business. Otherwise, the app could be shut down in the USA on that date. TikTok rejects the accusations on which the requirement is based, but it has recently become clear that the US Supreme Court is unlikely to follow suit. Because ByteDance has its headquarters in Beijing, the government there has a decisive say in a possible sale, as it must give its consent to the transfer of the algorithm that is central to TikTok and was developed there.
(mho)
