Why China May Be OK With TikTok Selling To Elon Musk

While China’s potential approval of TikTok’s sale to Elon Musk may seem surprising, it makes sense for both sides. As U.S. lawmakers ramp up pressure to sell TikTok’s U.S. operations or face a nationwide ban, reports say Chinese officials may consider Musk a suitable buyer.

Musk is a rare combination of influence and alignment with China’s interests for Beijing. The Chinese market is a key part of his Tesla operations, with the Shanghai Gigafactory producing some of Tesla’s highest quality vehicles. Musk’s friendly relationship with Chinese officials and his public statements, including support for China’s claims over Taiwan, make him a good U.S. business leader in Beijing’s eyes. A calculated move to keep leverage over the app while improving diplomatic ties between the U.S. and China amid U.S.-China trade tensions could allow Musk to acquire TikTok.

For Musk, acquiring TikTok is a golden opportunity to grow his presence in the social media space. Musk could tap into TikTok’s 170 million U.S. users and an existing, profitable ad platform, an area where his existing platform, X, has struggled. xAI could also leverage the app’s massive trove of user generated content to bolster Musk’s AI initiatives.

However, challenges remain. To transfer sensitive technologies such as its recommendation algorithm, ByteDance, TikTok’s parent company, would need Chinese government approval. Musk also has financial hurdles to overcome: A TikTok acquisition could cost upwards of $50 billion, even for one of the world’s richest people.

Despite user concerns about Musk’s controversial leadership, the deal could appeal to all stakeholders: Beijing still has some influence, Musk expands his empire, and the U.S. mitigates national security risks. But the TikTok sale saga is far from over, as the potential for user backlash and financing hurdles loom.

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