China may be OK with TikTok's sale to Elon Musk

China may be OK with TikTok's sale to Elon Musk

After initially rejecting the sale of TikTok to avoid a looming ban, the Chinese government now appears to have found a potential buyer in Elon Musk. Reports from Bloomberg and that Wall Street Journal According to Chinese officials, Chinese officials are discussing whether parts of TikTok's US version could potentially be sold to Musk's Platform X. CNN has not yet independently confirmed the discussions.

Turn in Chinese position

The talks represent a drastic change of course by China on the issue of selling TikTok, which is about to begin a law that could ban the app in the USA is set to come into force. To avoid a ban, the law would allow TikTok's parent company, ByteDance, to sell to a U.S. buyer.

USA: National Security Concerns

The reports come after the Supreme Court indicated last week that he the law because of national security concerns. TikTok itself argues that this represents an illegal interference with freedom of expression. China's Commerce Ministry had previously said it would "strongly reject" a forced sale decision, even if others interested buyers are present. TikTok parent company ByteDance has also made it clear that the app is not for sale.

Reasons to sell to Musk

Although ByteDance and Musk did not respond to the reports when contacted, there are certainly logical reasons why a sale of TikTok assets to Musk could be beneficial for everyone involved. ByteDance may be interested in turning a profit before losing access to the valuable American market.

For China, the sale to Musk could mean that TikTok is in the hands of an ally whose business empire relies heavily on the Chinese market and who has access to new President Trump. Given that China is seeking room for maneuver in tariff negotiations, this would be a strategic decision.

Musk as a supporter of freedom of expression

For Musk, acquiring TikTok, following the app's unsuccessful campaign against the First Amendment ban, would fit squarely into his often-described hypocritical image as a defender of free speech. It would also give him control of an even larger and more influential platform than X, which he has successfully used to advance his own interests, including supporting Donald Trump's re-election.

Financing challenges

However, such a deal could face significant hurdles, particularly with Musk needing to raise the enormous funds to purchase an app that estimates could cost between $40 billion and $50 billion.

China's consent required

ByteDance is expected to need approval from the Chinese government to sell TikTok's US operations Export restrictions, which could prohibit the sale of sensitive technologies without a license.

Musk's influence in China

Musk has had several conversations with Chinese officials in recent years, including a notable meeting with Premier Li Qiang. During this conversation, Li called Tesla a "successful model" for US-China cooperation. Musk himself has indicated that Tesla is ready to deepen cooperation with China.

Although Musk presents himself as a fighter for freedom of expression in the United States, he has remained rather reserved when it comes to the human rights situation in China. However, this could also strengthen its ties with Chinese officials, who may play a key role in the potential TikTok deal.

Future challenges for sales

If Musk actually manages to buy TikTok, the question remains whether users would remain under a new owner. After his takeover of Twitter, many frustrated users left the platform due to recommendations algorithm changes and the return of previously suspended accounts. A certain mistrust of Musk could also be transferred to TikTok.

Opinions about a possible sale are mixed: some users express concern about the consequences, while others welcome the prospect of Musk's takeover. Ultimately, a possible user revolt could jeopardize the value of the platform for Musk and potential investors.