A new report from Bloomberg says the Chinese government is considering selling its TikTok operations in the US to Elon Musk, to prevent the app from being effectively banned in the country.
This contingency plan appears to be one of several options China is considering as the US Supreme Court decides whether to uphold the TikTok ban in the US by January 19.
After this deadline, third-party internet service providers will be penalized for supporting TikTok operations in the country.
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According to the plan reported by Bloomberg, Elon Musk would oversee both his own X platform and TikTok's U.S. business. However, the report says Chinese government have not yet decided whether to move forward with this plan.
It is unclear whether ByteDance is aware of the Chinese government's plans and TikTok and Elon Musk's involvement in the discussions. Senior Chinese officials are discussing contingency plans as part of broader discussions about working with new US President Donald Trump.
Last week, the Supreme Court heard oral arguments on a law that would potentially ban TikTok in the U.S. The law was signed by Joe Biden in April. TikTok’s legal team argued that the law violates the free speech rights of millions of users in the U.S., while the U.S. government said ByteDance’s ownership of TikTok poses a national security risk.
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With the Supreme Court seemingly siding with the administration, TikTok could turn its attention to Trump when he takes office on Jan. 20. Trump, who had advocated banning TikTok during his first term, appears to have changed his mind. Late last month, he urged the Supreme Court to step in and delay Biden’s proposed ban.
Trump's view of TikTok began to change after he met in February with billionaire Jeff Yass, a major investor in ByteDance, who also owns a stake in Truth Social, Trump's social media company.
However, if the Bloomberg report is true and Elon Musk’s acquisition of TikTok goes through, it could cause major disruption. Other Chinese tech companies facing similar challenges in the U.S. market could turn to similar solutions to avoid a potential ban. It could also open the door for other companies to acquire businesses in order to remain viable in the country’s market.
See also: TikTok: Removes beauty filters for teens due to mental health concerns
On a larger scale, this situation raises questions about the future of global trade and investment, as governments increasingly intervene to protect their interests and industries. Companies should carefully consider these factors when making decisions about entering new markets or forming partnerships with foreign entities.
While we don't know about the discussions between the Chinese government and Elon Musk, the billionaire is used to making bold business moves. Will the TikTok acquisition be one of them?
Source: www.cnbc.com
