‘Reconciliation Between the U.S. and China’ and the Possibility of TikTok’s Sale
(Seoul = Yonhap News) Reporter Cha Byung-seop: As the prospect of TikTok’s service being banned in the U.S. looms, it has been reported that Chinese authorities are considering selling TikTok’s U.S. operations to Elon Musk, the CEO of Tesla, as an alternative.
Bloomberg News reported on the 13th (local time), citing multiple anonymous sources, that Chinese authorities are evaluating this option as a potential choice in case the so-called ‘TikTok ban’ is enforced in the U.S.
Chinese authorities strongly wish for TikTok to remain owned by its parent company, ByteDance, although the possibility seems slim.
Accordingly, sources explain that high-level Chinese officials have begun to examine the TikTok issue as part of a comprehensive discussion on how to collaborate with the incoming administration of U.S. President-elect Donald Trump.
Elon Musk, who is considered the key contributor to Trump’s presidential election victory, is set to lead the newly established Department of Government Efficiency (DOGE) for U.S. government restructuring.
Given the presence of hardliners against China in Trump’s second-term administration, Musk, who has Tesla manufacturing plants in China, is seen as being in a position to influence U.S.-China relations.
Therefore, it is possible that the Chinese side may use TikTok’s sale as a platform for reconciliation ahead of negotiations with the U.S. on tariffs and other matters.
One scenario includes Musk’s social media platform, X (formerly Twitter), taking control of TikTok with joint management by both sides.
For Musk, he could leverage TikTok’s over 170 million U.S. users to attract advertising for X, and his AI company, xAI, could utilize the vast data accumulated by TikTok.
However, sources noted that these discussions are in the early stages and no agreements have been reached among officials.
It remains unclear how much ByteDance is aware of these discussions or whether any talks have taken place between Musk, ByteDance, or TikTok.
Sources indicated that Chinese authorities possess a so-called ‘golden share’ regarding this matter, meaning TikTok’s fate isn’t solely in ByteDance’s hands. A golden share is a type of stock that gives significant influence over corporate key decision-making.
TikTok asserts that the golden share only affects its Chinese affiliate, Douyin, but remains under the influence of Chinese authorities.
The Chinese government prevents domestic companies from selling software algorithms abroad, requiring approval if TikTok intends to sell its recommendation engine and other technologies.
The TikTok ban law, which passed the U.S. Congress in April last year, stipulates that if ByteDance does not sell TikTok’s U.S. operations to an American company, TikTok will be banned in the U.S. from the 19th, for reasons including national security.
TikTok filed a lawsuit in a U.S. court, but both the first and second instance courts ruled that the law was not problematic. Subsequently, TikTok submitted a petition to the U.S. Supreme Court to halt the law’s enforcement, though the likelihood of approval is considered low.
President-elect Trump requested to postpone the ban deadline with the Supreme Court, stating he would resolve the TikTok issue after his inauguration on the 20th.
The value of TikTok’s U.S. operations is estimated to be around $40 billion to $50 billion (approximately 58 trillion to 73 trillion won), and although Musk is the world’s richest person, Bloomberg points out the challenge of how he could procure the funds.
Musk acquired Twitter in 2022 for $44 billion (approximately 64 trillion won) but still has considerable debt remaining.