Hey everybody. Welcome back to the Elon Musk
Podcast. This is a show where we discuss
the critical crossroads that shape SpaceX, Tesla X, The
Boring Company, and Neurolink. I'm your host Will Walden.
Is TikTok about to be sold to Elon Musk?
And could such a deal help bridge tensions between China
and the United States? How does Musk's deep political
and business connection factor into this possible transaction?
There's just a few of the questions swirling around the
future of Tik Tok's US operations as the short video
platform fights to avoid a ban in the United States.
Now, Chinese officials are weighing a scenario in which
Elon Musk could acquire Tik Tok's U.S. business if
Bytedance, the app's Chinese parent company, fails to
overturn the impending ban. Bytedance has appealed the ban
to the United States Supreme Court, but during arguments on
January 10th, the justices appeared inclined to uphold the
legislation. This has left the fate of TikTok
hanging in the balance as Chinese authorities debate their
next moves. Now, although Beijing's
preferred outcome is for TikTok to remain under Bytedance's
ownership, contingency plans are being explored in case the US
government forces a sale. According to sources familiar
with the matter, one possibility under discussion involves Musk's
social media company X taking over Tik Tok's US operations.
Now, Musk could integrate TikTok into his existing ventures,
leveraging its massive user base of over 170 million Americans to
attract advertisers and boost his other businesses, including
his AI company XAI. Now, the potential deal has
reportedly caught the attention of Chinese officials, given
Musk's prior dealings with the Chinese government through
Tesla, which has a major factory in Shanghai.
Now, the stakes for Byte Dance are enormous.
TikTok is valued at an estimated 40 to $50 billion, according to
Bloomberg Intelligence, and this valuation reflects the
platform's dominance in the United States.
But it also highlights the complexity of any potential
sale. Byte Dance and their legal team
have been vocal about the difficulty of separating Tik
Tok's US operations from its global structure.
And during arguments before the Supreme Court, Tik Tok's lawyers
describe the process as extraordinarily difficult,
citing shared software, shared algorithms and shared
operational infrastructure. This span multiple countries.
Now, adding to the complexity, the Chinese government has a
golden share and a Bytedance subsidiary, which grants Beijing
influence over certain strategic decisions.
And while Bytedance maintains that this golden share applies
only to its China based operations, Beijing's export
rules restrict the sale of advanced technologies, including
Tik Tok's powerful recommendation algorithm.
Now, this means any deal involving TikTok would require
Beijing's approval, granting the Chinese government significant
leverage. president-elect Donald Trump, who will take office on
January 20th, has expressed interest in resolving the TikTok
issue, even as the band is scheduled to take effect the day
before. Trump has suggested delaying the
band to allow more time for negotiations, calling it an
opportunity to save the app. And the incoming administration
could potentially use the TikTok talks as a bargaining chip in
broader negotiations with China on tariffs, trade and export
controls, according to people familiar with discussions now.
For Musk, the prospect of acquiring TikTok could align
with his business ambitions in Musk's X Platform has struggled
to reclaim its footing after his $44 billion acquisition of
Twitter in 2022, which left the company saddled.
With that, adding Tik Tok's vast user base and advertising
revenue could inject new life into Musk's social media
ambitions, while also providing data that could enhance his
artificial intelligence ventures.
However, how Musk would finance another multibillion dollar
purchase remains unclear. He has yet to fully repay the
loans from his Twitter deal, raising questions about his
capacity to secure additional funding for such a high profile
acquisition. Now, Musk has previously voiced
opposition to banning TikTok in the United States.
In a post on X in April, he wrote, In my opinion, TikTok
should not be banned in the United States, even though such
a ban may benefit the X platform.
Doing so would be contrary to freedom of speech and
expression. It is not what America stands
for. Now, Musk's comments reflect a
broader debate over whether banning TikTok violates the
First Amendment, a key argument that Byte Dance's lawyers have
raised in court. Now, despite Musk's public
standstill, any deal involving TikTok could reignite scrutiny
of his political and business ties.
Musk has been a prominent supporter of Donald Trump,
reportedly spending more than $250 million on the president
elect's re election campaign. He's also played an active role
in Trump's transition team, attending meetings at Mar a Lago
and cultivating close relationships with members of
the incoming administration. Critics argue that Musk's
political alignment with Trump could create conflicts of
interest, particularly if government contracts or
regulations affecting his companies come into play now.
Democrats and watchdog groups have already raised concerns
about Musk potentially leveraging his relationship with
Trump to influence politics that benefit his businesses,
including Tesla and also SpaceX. Now, Musk's companies hold
billions of dollars in government contracts, their
fears that the incoming administration might expand
subsidies or ease regulatory scrutiny of his ventures.
Musk has also faced investigations by the Securities
and Exchange Commission or the SEC and labor regulators, and
his high profile status has often placed him at the center
of controversy for Byte Dance. Selling Tik Tok's US operations
to Musk might not be the only option on the table, though.
According to insiders, the company has also considered
relocating its US user base to a separate rebranded app as a way
to sidestep the ban. However, it's unclear whether
such a strategy would satisfy US regulators, who have framed the
issue as one of national security.
The US government has long expressed concerns that Tik
Tok's ownership by a Chinese company poses risks related to
data privacy and potential surveillance, allegations that
Bytedance has denied other suitors for TikTok have also
emerged in recent years. Microsoft and Oracle both
pursued acquisitions in 2020, and more recently, billionaire
Frank McCourt and investor Kevin O'Leary have promoted an
alternative plan called Project Liberty to buy the app.
O'Leary claims to have discussed the proposal with Trump
directly, though it remains to be seen whether such plans will
gain traction. And while Beijing weighs its
options, it's clear that Chinese government views the TikTok
negotiations as part of a broader geopolitical chess
board. Chinese officials have
previously condemned US efforts to ban TikTok, labeling them as
economic bullying and accusing Washington as attempting to
plunder a successful Chinese business.
Beijing's interest in Musk as a potential buyer underscores the
strategic importance of maintaining influence over the
app while navigating its contentious relationship with
the United States. And Musk's existing ties to
China could play a critical role in any potential big deal.
Tesla's Shanghai factory, which opened in 2019, has become the
company's largest production base, helping Musk expand
Tesla's market share in China while building goodwill with
officials. Now, however, Musk has also
spoken out against certain U.S. trade policies targeting China,
such as tariffs on EVs, positioning himself as a complex
figure in the evolving dynamic between the two nations.
Now as the deadline approaches though, times running out for
Byte Dance, whether through legal appeals and negotiated
sale or other strategies, the outcome will have significant
ramifications for Byte Dance, Musk X, and all of society that
uses these apps. For now, the uncertainty lingers
and all eyes remain on these key players as this high stakes
drama unfolds right in front of us on this podcast.
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