TikTok Calls Report on Possible Sale to Elon Musk 'Pure Fiction'

Short video app TikTok has rejected reports of a possible sale to billionaire Elon Musk as “pure fiction”, with just five days to go before it faces a potential ban in the United States.

TikTok is facing a January 19 deadline for a ban in the US, unless its Chinese owner ByteDance divests its US operations.

ByteDance has previously said that China would not allow it to sell TikTok or its algorithm, but on Monday, media reports said Chinese officials were in preliminary talks for a potential option to sell the short-video app’s US operations to Musk.

Also on AF: Biden Restricts Access to AI Chips to US Firms And Its Allies

Musk is known to have close ties with Beijing, especially as China remains one of Tesla’s biggest markets. According to one industry executive, Musk’s ties with Chinese premier Li Qiang “made everything possible for Tesla” in the country.

Meanwhile, the billionaire is now also a close aide to US president-elect Donald Trump, who has promised a hawkish stance on China, but also said he has a ‘warm spot’ for TikTok in his heart.

Chinese officials are, effectively, considering “the possibility of allowing a trusted non-Chinese party such as Elon Musk to invest in or take control of TikTok’s US operations,” the Wall Street Journal reported, citing people familiar with the discussions.

According to another media report, Chinese officials are considering a scenario where Musk’s social media platform X could take control of TikTok US and run the business together.

But officials are yet to reach a consensus on how to proceed, the report said. TikTok’s US operations could either be sold through a competitive process or an arrangement by the government, it added, suggesting that the future of the app is no longer solely in ByteDance’s control.

The WSJ also said it was unclear whether officials had discussed the possible sale to Musk with top Chinese leaders.

It said that officials believe it may be best to let the ban “go into effect and keep TikTok under ByteDance’s ownership so that negotiations could continue after Trump takes over,” WSJ reported.

When asked for a response to reports of a possible sale to Musk, a TikTok spokesperson repeated a single-lined comment to multiple media outlets: “We can’t be expected to comment on pure fiction.”

‘Push comes to shove’

The reports of a potential sale come after a series of efforts by ByteDance and TikTok to avert the US ban have failed to yield a breakthrough.

Those efforts include calling on American courts to halt the law passed by the Joe Biden government that set in motion next week’s divest-or-ban deadline. Their most recent suit challenging the law — filed in the US Supreme Court — is widely expected to be struck down after the app received a “frosty” reception from the court’s conservative justices.

And if reports of Beijing now considering a potential sale of TikTok are true, they would be the exact outcome US officials were hoping for.

Solicitor General Elizabeth Prelogar, who argued on behalf of the US government for upholding the divest-or-ban law, told the Supreme Court that she expected ByteDance to ultimately consider a sale “when push comes to shove.”

Once restrictions on the app take effect, “it will fundamentally change the landscape with respect to what ByteDance will consider,” Prelogar had said.

It remains unclear how much ByteDance is aware of any discussions by Chinese officials, or of Musk and TikTok’s involvement, and there is no information on whether ByteDance, TikTok and Musk have engaged in any talks regarding a possible deal.

Elon Musk, X, and China’s Cyberspace and Ministry of Commerce did not immediately respond to a request for comment.

Lawmakers ask for deadline extension

Meanwhile, two Democratic lawmakers have urged Congress and Biden to extend the Sunday deadline.

Senator Edward Markey said he planned to introduce legislation to delay the deadline by which ByteDance must sell TikTok or face a ban by an additional 270 days.

“A ban would dismantle a one-of-a-kind informational and cultural ecosystem, silencing millions in the process,” Markey said.

“A TikTok ban would impose serious consequences on millions of Americans who depend on the app for social connections and their economic livelihood. We cannot allow that to happen.”

Representative Ro Khanna, a Democrat, also urged Biden and Trump “to put a pause on this ban so 170 million Americans don’t lose their free speech. Millions of Americans’ livelihood will be ended if this ban takes place.”

A TikTok lawyer had told the Supreme Court on Friday it would be impossible to complete a sale by next week’s deadline. If banned TikTok would quickly go dark and “essentially the platform shuts down,” he had said.

Vishakha Saxena, with Reuters

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]