Elon Musk tipped to 'acquire US operations of TikTok from China' amid threat of ban

The preliminary talks explore the possibility of Musk, a prominent Trump supporter, acquiring TikTok's American business through his company X.

Whilst Chinese officials strongly prefer TikTok to remain under ByteDance ownership, they are evaluating alternative options following recent US Supreme Court signals that justices may uphold the ban.

Beijing officials are engaged in expansive discussions about TikTok's future as part of their preparations for working with Donald Trump's administration.

The Chinese government, which holds a 'golden share' in a ByteDance affiliate, maintains significant influence over the company's strategy and operations.

TikTok is currently contesting the impending ban with an appeal to the US Supreme Court.

The Chinese government sees TikTok negotiations as a potential area for reconciliation amid broader discussions about tariffs, export controls and other issues with the incoming Trump administration.

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ByteDance and TikTok representatives have not responded to requests for comment on these developments.

Under one scenario discussed by Chinese officials, Musk's X platform would take control of TikTok's US operations and run both businesses together.

The merger could significantly boost X's advertising appeal, with TikTok's US user base exceeding 170 million.

Musk's artificial intelligence company, xAI, could potentially benefit from the vast amounts of data generated by TikTok users.

However, the discussions remain preliminary, with no firm consensus reached by Chinese officials.

It remains unclear whether ByteDance is aware of these government discussions or if any direct talks have occurred between TikTok, Musk, and ByteDance regarding potential deal terms.

Musk has previously expressed opposition to banning TikTok in the United States, despite potential benefits to his X platform.

"In my opinion, TikTok should not be banned in the USA, even though such a ban may benefit the X platform," he wrote on X in April.

"Doing so would be contrary to freedom of speech and expression. It is not what America stands for."

Musk invested more than $250million in Trump's re-election campaign and is expected to take a prominent role in improving government efficiency after Trump assumes office on 20 January.

TikTok's US operations could be valued between $40billion and $50billion, according to Bloomberg Intelligence analysts.

The sum presents a significant financial challenge even for the world's richest person, who paid $44billion for Twitter in 2022 and still carries substantial loans from that purchase.

Any potential sale would require Chinese government approval due to Beijing's export rules preventing Chinese companies from selling their software algorithms.

The process of separating TikTok's US business would be highly complex, as the company's lawyers argued before the Supreme Court that splitting the US portions would be "extraordinarily difficult".

Alternative buyers have emerged, including billionaire Frank McCourt and "Shark Tank" investor Kevin O'Leary through Project Liberty.

Musk holds a positive reputation among ByteDance employees in China, who view him as a successful entrepreneur with experience engaging with Chinese authorities.

His company Tesla established a significant presence in China with its Shanghai factory in 2019, which has since become the company's largest production base.

The facility has helped Tesla expand its market share in China whilst building goodwill with government officials.

Despite Trump staffing his incoming administration with China hawks like Secretary of State nominee Marco Rubio, Musk has voiced opposition to some recent China trade policies.

He has specifically criticised the Biden administration's tariffs on Chinese electric vehicles.