Can Elon Musk Save TikTok Amid US Ban Threats?

China's Backup Plan for TikTok: Exploring a Potential Sale

Reports indicate that Chinese officials are considering a backup plan for TikTok amid the risk of a US ban. Following the Supreme Court's signals, TikTok's legal avenues appear to be dwindling. Several major news outlets have reported that China is contemplating permitting ByteDance to sell the app, which goes against its previous stance.

Elon Musk as a Potential Buyer or Broker

In a surprising twist, China is purportedly evaluating the involvement of Elon Musk, the tech billionaire and President-elect Donald Trump's close associate, as either a broker or potential buyer in the sale.

As reported by the Financial Times, Wall Street Journal, and Bloomberg, unnamed sources have revealed discussions among Chinese officials regarding the sale.

TikTok spokesperson Michael Hughes refuted these claims as "pure fiction," and neither the Chinese embassy in the US nor Musk's company X responded to inquiries regarding this situation.

Interest from Multiple Parties

Many individuals, including investors and celebrities, have expressed interest in buying TikTok. Notable figures such as Kevin O’Leary and Mr. Beast are among those vying for ownership. Despite the interest, the challenge lies in finding a willing seller, as the Chinese government has previously resisted approving a sale.

Musk's Unique Position in Negotiations

With his direct connection to Trump and aspirations for X to evolve similarly to TikTok, Musk could play a pivotal role in a potential deal. His extensive dealings with Chinese authorities, particularly given that a significant portion of Tesla's sales derive from China, positions him uniquely to bridge the interests of both nations.

Joint Venture Possibilities

Long Le, an international business professor at Santa Clara University, theorizes that China may be inclined to pursue a joint venture similar to arrangements foreign companies have in China. According to US law, foreign adversaries control an app if individuals from those countries have at least a 20 percent stake.

"If a joint venture were on the table, Musk would be ideal due to his ties to Trump and growing comfort with the Chinese government," suggests Le. This collaboration could foster economic ties despite the ongoing decoupling between the US and China.

Chinese Government Considerations

China may delay any sale if it perceives a chance for TikTok to remain under ByteDance's ownership. As a national pride asset, surrendering TikTok would send unfavorable optics globally. Furthermore, the Chinese government could leverage the situation to shift blame onto the US regarding potential global fallout from a ban.

Potential Effects of a Ban

If TikTok faces a ban, the timeline for user impact remains uncertain. Major players like Apple and Google would need to remove the app from their platforms. Previously downloaded versions would still be accessible, but companies like Oracle, which houses TikTok’s US data, might also have to cease their services.

Although users might access TikTok via virtual private networks (VPNs), this complicates the user experience significantly. However, negotiations may still progress even after a ban is enacted, pending a last-minute legislative intervention.

Conclusion

The situation surrounding TikTok and its potential sale remains fluid, with numerous factors at play, including political relationships and market dynamics. As of now, the outcome remains uncertain, but the implications of either a sale or a ban will resonate across the tech landscape.

Key Takeaways:

• The Chinese government may consider a sale of TikTok, moving away from its previous resistance.
• Elon Musk's involvement could facilitate a joint venture or acquisition.
• Multiple interested buyers are in the mix, reflecting the app's enduring popularity.
• User access to TikTok may be significantly impacted by a ban, though workarounds exist.