President-elect Donald Trump has said he wants to “save” TikTok. One possible rescuer could be Elon Musk.
Chinese government officials, according to reports by Bloomberg and The Wall Street Journal, have discussed selling the social media app’s US business to the owner of X, formerly known as Twitter. TikTok’s parent company, ByteDance, is Chinese.
The officials would prefer to keep TikTok under ByteDance ownership, according to the media reports, but have discussed the sale to Musk as among their contingency plans if the Supreme Court upholds a US law that bans the platform on Jan. 19 unless it is sold to an owner not controlled by a foreign adversary.
Trump, who on the campaign trail suggested in a social media post that he would “save TikTok,” has asked the Supreme Court to suspend the divestment deadline and consider his preference for a “negotiated resolution” — given that, as president, he will be responsible for national security. Trump takes office on Jan. 20.
Antitrust experts predict that Musk could clear US legal hurdles imposed by a TikTok acquisition, which some estimate could amount to $40-50 billion. One reason is TikTok and X have distinct users.
“They are both broadly in the social media space, but the different user bases and content means that they are not really competitors,” David Olson, an antitrust law professor for Boston College Law School, told Yahoo Finance.
TikTok is primarily a platform for sharing short, creative videos with a heavy emphasis on visual entertainment and trending challenges, said Case Western University Reserve Law School professor Anat Alon-Beck. X is focused on text-based posts for quick updates as well as news sharing.
“There are differences between TikTok and [X],” Alon-Beck said.
Musk has a close relationship with the incoming president, having spent more than $250 million supporting his re-election campaign and helping lead a government cost-cutting effort as part of a new Department of Government Efficiency (DOGE).
Musk paid $22 billion for X in 2022 and also runs a number of other companies, including electric-vehicle maker Tesla (TSLA), SpaceX, Neuralink, the Boring Co. and artificial-intelligence startup X.AI.
Tesla has a factory in China and sells a lot of its cars to that part of the world.
Musk posted on X in April that “In my opinion, TikTok should not be banned in the USA, even though such a ban may benefit the X platform.”
“Doing so would be contrary to freedom of speech and expression. It is not what America stands for.”
Bloomberg and The Wall Street Journal both reported there are a number of unknowns surrounding any possible deal with Musk, including whether he would have to sell any other of his holdings, whether US regulators would approve and what sort of influence officials in Beijing would have in suggesting ByteDance sell to a particular buyer.
A TikTok spokesperson responded to the Bloomberg report by saying “we cannot be expected to comment on pure fiction.”
Alon-Beck of Case Western University said a TikTok-X transaction could look similar to Meta’s (META) 2012 acquisition of Instagram, which the FTC originally approved after a review, then later sued the company to undo it.
Even if Musk were to acquire TikTok’s coveted algorithm and artificial intelligence capabilities, which the company has said it would not sell, Musk could still clear regulatory hurdles.
“So far he is just one of many players – and not the largest,” Olson said.
Dan Ives of Wedbush Securities said in a note that “this would significantly enhance the value of Twitter/X platform and likely Musk would take outside investments for this potential golden asset pickup.”
“It’s also possible that instead of an outright sale this results in a joint partnership with Musk playing a major role and helping avoid a true ban of TikTok in the US,” the analyst added.
Legal experts said Musk could also be politically insulated from antitrust scrutiny because Trump’s incoming Justice Department and Federal Trade Commission could lack motivation to investigate such a transaction.
“Given his proximity to President-elect Trump, I do not think that the DOJ or FTC under the Trump administration is likely to pursue an antitrust case against the merger,” Olson said.
Musk may not be the only party involved if any sale negotiations do in fact take place.
Investor and “Shark Tank” star Kevin O’Leary told Yahoo Finance last week that he and a consortium of business professionals led by billionaire Frank McCourt Jr. are willing to pay up to $20 billion for TikTok, calling it a“legacy opportunity.”
The famed investor told Yahoo Finance that the group’s proposal — which excludes the platform’s algorithm — represents a compelling deal.
McCourt, the founder of internet advocacy group Project Liberty and former owner of the LA Dodgers, also recently expressed optimism about a potential deal on Yahoo Finance’s Opening Bid podcast.
“There’s a deal to be made here so that US TikTok can stay in business,” McCourt said. “We want to see the platform stay in business and the 170 million [US users] enjoy it.”
US Solicitor General Elizabeth Prelogar, who last week argued on behalf of the government’s TikTok’s divestment law before the Supreme Court, told the justices it was not clear whether Trump could extend the Jan. 19 divestment deadline when he becomes president. But he could decline to enforce the law after he takes office.
TikTok lawyer Noel Francisco told the justices that, “[It] is possible that come January 20, 21st, 22nd we might be in a different world. Again, that’s one of the reasons why I think it makes perfect sense to issue a preliminary injunction here and simply buy everybody a little breathing space.”
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