TikTok discusses potential sale to Elon Musk as Supreme Court ruling looms

Chinese officials are weighing an option that could see Elon Musk acquiring TikTok’s U.S. operations if the app is unable to avoid a controversial ban, according to an exclusive report from Bloomberg. The discussions reflect Beijing’s strategic considerations as TikTok faces mounting pressure in the United States.

The report comes as the U.S. Supreme Court weighs free speech arguments over a potential nationwide ban. The justices are reviewing the Protecting Americans from Foreign Adversary Controlled Applications Act. This law, which targets TikTok, imposes steep civil penalties on entities that continue to operate the app after January 19

The sources told Bloomberg that Beijing prefers that TikTok remain under ByteDance Ltd., its parent company, which is challenging the looming ban through an appeal to the U.S. Supreme Court. However, comments from the justices during arguments on January 10 suggest the law may be upheld, prompting senior Chinese officials to explore backup plans.

China Considers Selling TikTok U.S. Operations to Elon Musk

One proposal involves Musk’s X, formerly Twitter, taking control of TikTok’s U.S. operations and integrating the platform with his other ventures. With over 170 million U.S. users, TikTok could enhance X’s advertising reach and bolster Musk’s artificial intelligence projects through xAI, leveraging the massive data generated by TikTok.

“Under one scenario that’s been discussed by the Chinese government, Musk’s X — the former Twitter — would take control of TikTok US and run the businesses together, the people said,” Bloomberg reported.

While the Chinese government has yet to finalize its stance, these discussions are said to be part of a broader effort to manage trade and diplomatic tensions with the incoming Trump administration. Officials view the TikTok negotiations as a potential bridge for easing strained relations.

A Deal with High Stakes

A potential sale to Musk carries strategic appeal for China. Musk, a known supporter of Trump’s re-election campaign, has cultivated a working relationship with the Chinese government through ventures like Tesla’s Shanghai factory. These ties could make him a favorable candidate for managing TikTok’s U.S. operations.

TikTok’s U.S. business, valued at $40–50 billion according to Bloomberg Intelligence analysts, represents a significant investment—even for the world’s richest person. Musk’s ability to finance such a deal remains uncertain, particularly as he continues to address financial obligations from his $44 billion acquisition of Twitter in 2022.

Challenges in the TikTok Sale

ByteDance’s leadership has consistently prioritized legal efforts to overturn the U.S. legislation requiring TikTok’s divestment due to national security concerns. TikTok’s attorneys argue the ban violates First Amendment rights, a point that remains under Supreme Court review.

Spinning off TikTok’s U.S. operations would pose considerable logistical challenges, affecting stakeholders across China and the United States. ByteDance insists that the Chinese government’s influence over its strategy is limited to its domestic subsidiary, Douyin Information Service Co. However, Beijing’s export rules, which restrict the sale of algorithms like TikTok’s recommendation engine, ensure the government retains a critical role in any sale.

Competing Interests and Possible Outcomes

Other bidders may also enter the picture. Project Liberty, backed by billionaire Frank McCourt and investor Kevin O’Leary, has expressed interest in acquiring TikTok, with O’Leary reportedly discussing the proposal with Trump. Tech giants like Microsoft and Oracle have previously explored deals with the platform, and Oracle maintains a key technology partnership with ByteDance.

An alternative scenario could involve migrating TikTok’s U.S. user base to a rebranded platform, though it’s unclear how effective this would be in avoiding a ban. For now, ByteDance appears focused on fighting to retain control of TikTok rather than ceding its U.S. operations.

Broader Implications

As TikTok’s fate hangs in the balance, Musk’s position as a business leader with ties to both the U.S. and China adds complexity to the ongoing discussions. His ventures, from Tesla’s massive Shanghai factory to his outspoken criticism of certain U.S. trade policies, highlight his ability to influence cross-border dynamics.

The outcome of these talks could significantly reshape the tech landscape, as TikTok’s U.S. operations represent a major asset in the ongoing struggle for control of digital platforms and their global influence. For now, all eyes remain on the Supreme Court’s decision and the potential ripple effects it could have on this high-stakes negotiation.