January 14, 2025 — 4.35pm Save AP Photo The Chinese government holds a so-called golden share in a ByteDance affiliate that gives it influence over the company’s strategy and operations. TikTok maintains that the control only applies to the China-based subsidiary, Douyin Information Service Co., and has no bearing on ByteDance operations outside China. Still, Beijing’s export rules prevent Chinese companies from selling their software algorithms, like the one integral to TikTok. Because the Chinese government would have to approve a sale that includes TikTok’s valuable recommendation engine, it has a significant voice in any possible deal. Loading TikTok’s US operations could be valued at around $US40 billion to $US50 billion, Bloomberg Intelligence analysts Mandeep Singh and Damian Reimertz estimated last year – a substantial sum even for the world’s richest person. It’s not clear how Musk could pull off such a transaction, whether it would require the sale of other holdings, or whether the US government would approve. He paid $US44 billion for Twitter in 2022 and is still paying off sizable loans. Musk has a positive reputation among many ByteDance employees in China, according to a person familiar with the matter. He is seen as a very successful entrepreneur who has experience engaging with the Chinese government through his Tesla Inc. business, the person added. ByteDance’s leaders have repeatedly said their priority is to fight US legislation that requires the Beijing-based company to sell or shut down US operations because of national security concerns. TikTok’s lawyers have argued the legislation violates free speech laws under the Constitution’s First Amendment. A majority of Supreme Court justices suggested the security concerns take priority over free speech, although they have yet to issue a formal decision. President-elect Trump, who takes office on January 20, has sought to delay the TikTok ban – which takes effect on January 19 – so he can work on the negotiations. He has said he wants to “save” the app, and there’s been speculation he could take last-minute action to sidestep the ban. Loading On a practical level, spinning off TikTok’s US business would be highly complex, affecting shareholders in China as well as the US. Lawyers for TikTok argued before the Supreme Court that separating the US portions of the product would be “extraordinarily difficult.” It’s unclear if US TikTok would be sold off in a competitive process, or if a sale would be arranged by the government. Billionaire Frank McCourt and Shark Tank investor Kevin O’Leary are part of a bid through Project Liberty to acquire TikTok, which O’Leary has said he discussed with Trump. In the past, Microsoft had sought to acquire the business, and Oracle has a deep technology partnership with the company. One alternative for TikTok would be to move its existing US customers over to a similar app – with different branding – to potentially sidestep the ban, one of the sources said. It’s not clear how effective such a move would be. One person close to the company, who spoke on the condition of anonymity because of the sensitivity of the strategy, said before the Supreme Court hearing that the legal battle was still the focus of top executives, and they would prefer to keep fighting in the US rather than sell TikTok US and cede control for good. Musk is in a position to influence the China-US relationship as the world’s richest person with businesses that straddle the world’s two largest economies. Tesla, where Musk is chief executive, erected a sprawling factory in Shanghai in 2019 and has since expanded the facility into the company’s largest production base. The effort helped Tesla expand its market share in China despite tough local competition and build goodwill with government officials. While Trump is staffing his incoming administration with China hawks such as secretary of state nominee Marco Rubio, Musk has spoken out against some recent China trade policies, including the Biden administration’s tariffs on Chinese electric vehicles. With assistance from Zheping Huang, Alexandra S. Levine and Kurt Wagner. Bloomberg Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter. Save