The American part of TikTok could be sold to Elon Musk if the service is banned

The approaching change of power in the United States is preparing another intrigue regarding the fate of the Chinese social network TikTok in this country. A law banning its operation in the United States could come into force any day now, and President-elect Donald Trump is not against maintaining the site. The Chinese side expects to sell the local business to Elon Musk if TikTok is banned from operating in the United States.

Image source: Unsplash, Olivier Bergeron

The American billionaire is not only the richest person on the planet and a close associate of Trump, but also the owner of the social network X, which was known as Twitter before his purchase in 2022. Musk should understand the problems of the social network, and he is expected to be ready, out of solidarity with Trump, to somehow preserve the legacy of TikTok for American users.

However, the main priority for the Chinese ByteDance, which owns TikTok, is still maintaining control over its American assets. However, after a preliminary hearing on January 10, it became clear that the American justice system as a whole is inclined to support a ban on TikTok operating in the United States unless ByteDance agrees to transfer the necessary infrastructure to the control of an American company. If TikTok’s assets in the United States are sold, the Chinese government should also have some influence on this transaction. The latter party is considering an option under which TikTok’s assets in the United States would come under the control of Musk’s company X, and the social networks themselves would undergo mutual integration. TikTok has 170 million users in the US, and X definitely won’t want to throw away such an audience, according to the authors of the idea. In addition, the data arrays generated by TikTok could be useful to xAI, another Musk company that specializes in artificial intelligence.

Last April, Musk spoke out in favor of keeping TikTok operating in the US, although such measures would help X win over users. Chapter X considers the TikTok ban a serious attack on freedom of speech in the United States. Chinese authorities are ready to use Trump’s interest in maintaining access to TikTok for American users as a bargaining chip in negotiations on other topics. The Chinese government has the right to vote in the capital of one of the related ByteDance structures, and therefore is legally able to influence the fate of the company. Moreover, the Chinese authorities prohibit the export of sensitive technologies without their approval, and TikTok owns a valuable recommendation algorithm, which they do not want to cede to foreigners.

According to last year’s estimates, TikTok’s assets in the United States could be worth between $40 and $50 billion. Musk paid about $44 billion for Twitter in 2022, but considered this price too high and tried in every possible way to bring it down until the last moment. Paying comparable money for the American business TikTok will also not be very easy for Musk. In addition, separating TikTok’s US business from its main business will be difficult from a legal point of view, and it will take a fair amount of time. ByteDance management is determined to defend its interests in court, and considers the sale of TikTok assets in the United States as a last resort. One of the alternatives involves moving the American version of TikTok to a new application along with its users, but such a decorative transformation is unlikely to satisfy the American authorities.