Latest / Elon Musk Podcast / Elon's Trump Friendship could help him buy TikTok

Transcript

Elon's Trump Friendship could help him buy TikTok · Elon Musk Podcast

• 0:01
  Hey everybody. Welcome back to the Elon Musk
• 0:04
  Podcast. This is a show where we discuss
• 0:07
  the critical crossroads that shape SpaceX, Tesla X, The
• 0:11
  Boring Company, and Neurolink. I'm your host Will Walden.
• 0:17
  Is TikTok about to be sold to Elon Musk?
• 0:20
  And could such a deal help bridge tensions between China
• 0:23
  and the United States? How does Musk's deep political
• 0:27
  and business connection factor into this possible transaction?
• 0:31
  There's just a few of the questions swirling around the
• 0:33
  future of Tik Tok's US operations as the short video
• 0:36
  platform fights to avoid a ban in the United States.
• 0:40
  Now, Chinese officials are weighing a scenario in which
• 0:43
  Elon Musk could acquire Tik Tok's U.S. business if
• 0:47
  Bytedance, the app's Chinese parent company, fails to
• 0:50
  overturn the impending ban. Bytedance has appealed the ban
• 0:54
  to the United States Supreme Court, but during arguments on
• 0:57
  January 10th, the justices appeared inclined to uphold the
• 1:01
  legislation. This has left the fate of TikTok
• 1:04
  hanging in the balance as Chinese authorities debate their
• 1:08
  next moves. Now, although Beijing's
• 1:10
  preferred outcome is for TikTok to remain under Bytedance's
• 1:13
  ownership, contingency plans are being explored in case the US
• 1:16
  government forces a sale. According to sources familiar
• 1:20
  with the matter, one possibility under discussion involves Musk's
• 1:23
  social media company X taking over Tik Tok's US operations.
• 1:29
  Now, Musk could integrate TikTok into his existing ventures,
• 1:31
  leveraging its massive user base of over 170 million Americans to
• 1:36
  attract advertisers and boost his other businesses, including
• 1:41
  his AI company XAI. Now, the potential deal has
• 1:45
  reportedly caught the attention of Chinese officials, given
• 1:48
  Musk's prior dealings with the Chinese government through
• 1:51
  Tesla, which has a major factory in Shanghai.
• 1:54
  Now, the stakes for Byte Dance are enormous.
• 1:57
  TikTok is valued at an estimated 40 to $50 billion, according to
• 2:01
  Bloomberg Intelligence, and this valuation reflects the
• 2:04
  platform's dominance in the United States.
• 2:06
  But it also highlights the complexity of any potential
• 2:08
  sale. Byte Dance and their legal team
• 2:11
  have been vocal about the difficulty of separating Tik
• 2:14
  Tok's US operations from its global structure.
• 2:17
  And during arguments before the Supreme Court, Tik Tok's lawyers
• 2:20
  describe the process as extraordinarily difficult,
• 2:25
  citing shared software, shared algorithms and shared
• 2:28
  operational infrastructure. This span multiple countries.
• 2:32
  Now, adding to the complexity, the Chinese government has a
• 2:35
  golden share and a Bytedance subsidiary, which grants Beijing
• 2:38
  influence over certain strategic decisions.
• 2:41
  And while Bytedance maintains that this golden share applies
• 2:45
  only to its China based operations, Beijing's export
• 2:49
  rules restrict the sale of advanced technologies, including
• 2:52
  Tik Tok's powerful recommendation algorithm.
• 2:56
  Now, this means any deal involving TikTok would require
• 2:59
  Beijing's approval, granting the Chinese government significant
• 3:02
  leverage. president-elect Donald Trump, who will take office on
• 3:06
  January 20th, has expressed interest in resolving the TikTok
• 3:10
  issue, even as the band is scheduled to take effect the day
• 3:13
  before. Trump has suggested delaying the
• 3:16
  band to allow more time for negotiations, calling it an
• 3:20
  opportunity to save the app. And the incoming administration
• 3:23
  could potentially use the TikTok talks as a bargaining chip in
• 3:27
  broader negotiations with China on tariffs, trade and export
• 3:31
  controls, according to people familiar with discussions now.
• 3:35
  For Musk, the prospect of acquiring TikTok could align
• 3:38
  with his business ambitions in Musk's X Platform has struggled
• 3:41
  to reclaim its footing after his $44 billion acquisition of
• 3:45
  Twitter in 2022, which left the company saddled.
• 3:48
  With that, adding Tik Tok's vast user base and advertising
• 3:52
  revenue could inject new life into Musk's social media
• 3:56
  ambitions, while also providing data that could enhance his
• 3:59
  artificial intelligence ventures.
• 4:01
  However, how Musk would finance another multibillion dollar
• 4:05
  purchase remains unclear. He has yet to fully repay the
• 4:08
  loans from his Twitter deal, raising questions about his
• 4:11
  capacity to secure additional funding for such a high profile
• 4:15
  acquisition. Now, Musk has previously voiced
• 4:18
  opposition to banning TikTok in the United States.
• 4:20
  In a post on X in April, he wrote, In my opinion, TikTok
• 4:24
  should not be banned in the United States, even though such
• 4:27
  a ban may benefit the X platform.
• 4:29
  Doing so would be contrary to freedom of speech and
• 4:33
  expression. It is not what America stands
• 4:35
  for. Now, Musk's comments reflect a
• 4:37
  broader debate over whether banning TikTok violates the
• 4:40
  First Amendment, a key argument that Byte Dance's lawyers have
• 4:44
  raised in court. Now, despite Musk's public
• 4:48
  standstill, any deal involving TikTok could reignite scrutiny
• 4:52
  of his political and business ties.
• 4:54
  Musk has been a prominent supporter of Donald Trump,
• 4:56
  reportedly spending more than $250 million on the president
• 5:01
  elect's re election campaign. He's also played an active role
• 5:04
  in Trump's transition team, attending meetings at Mar a Lago
• 5:08
  and cultivating close relationships with members of
• 5:11
  the incoming administration. Critics argue that Musk's
• 5:14
  political alignment with Trump could create conflicts of
• 5:17
  interest, particularly if government contracts or
• 5:20
  regulations affecting his companies come into play now.
• 5:23
  Democrats and watchdog groups have already raised concerns
• 5:26
  about Musk potentially leveraging his relationship with
• 5:29
  Trump to influence politics that benefit his businesses,
• 5:32
  including Tesla and also SpaceX. Now, Musk's companies hold
• 5:37
  billions of dollars in government contracts, their
• 5:40
  fears that the incoming administration might expand
• 5:42
  subsidies or ease regulatory scrutiny of his ventures.
• 5:46
  Musk has also faced investigations by the Securities
• 5:49
  and Exchange Commission or the SEC and labor regulators, and
• 5:52
  his high profile status has often placed him at the center
• 5:56
  of controversy for Byte Dance. Selling Tik Tok's US operations
• 6:00
  to Musk might not be the only option on the table, though.
• 6:04
  According to insiders, the company has also considered
• 6:07
  relocating its US user base to a separate rebranded app as a way
• 6:12
  to sidestep the ban. However, it's unclear whether
• 6:15
  such a strategy would satisfy US regulators, who have framed the
• 6:19
  issue as one of national security.
• 6:22
  The US government has long expressed concerns that Tik
• 6:24
  Tok's ownership by a Chinese company poses risks related to
• 6:29
  data privacy and potential surveillance, allegations that
• 6:32
  Bytedance has denied other suitors for TikTok have also
• 6:35
  emerged in recent years. Microsoft and Oracle both
• 6:38
  pursued acquisitions in 2020, and more recently, billionaire
• 6:43
  Frank McCourt and investor Kevin O'Leary have promoted an
• 6:48
  alternative plan called Project Liberty to buy the app.
• 6:52
  O'Leary claims to have discussed the proposal with Trump
• 6:55
  directly, though it remains to be seen whether such plans will
• 6:58
  gain traction. And while Beijing weighs its
• 7:02
  options, it's clear that Chinese government views the TikTok
• 7:04
  negotiations as part of a broader geopolitical chess
• 7:07
  board. Chinese officials have
• 7:09
  previously condemned US efforts to ban TikTok, labeling them as
• 7:14
  economic bullying and accusing Washington as attempting to
• 7:18
  plunder a successful Chinese business.
• 7:21
  Beijing's interest in Musk as a potential buyer underscores the
• 7:24
  strategic importance of maintaining influence over the
• 7:27
  app while navigating its contentious relationship with
• 7:30
  the United States. And Musk's existing ties to
• 7:34
  China could play a critical role in any potential big deal.
• 7:38
  Tesla's Shanghai factory, which opened in 2019, has become the
• 7:42
  company's largest production base, helping Musk expand
• 7:45
  Tesla's market share in China while building goodwill with
• 7:48
  officials. Now, however, Musk has also
• 7:51
  spoken out against certain U.S. trade policies targeting China,
• 7:55
  such as tariffs on EVs, positioning himself as a complex
• 7:58
  figure in the evolving dynamic between the two nations.
• 8:02
  Now as the deadline approaches though, times running out for
• 8:05
  Byte Dance, whether through legal appeals and negotiated
• 8:09
  sale or other strategies, the outcome will have significant
• 8:13
  ramifications for Byte Dance, Musk X, and all of society that
• 8:19
  uses these apps. For now, the uncertainty lingers
• 8:22
  and all eyes remain on these key players as this high stakes
• 8:26
  drama unfolds right in front of us on this podcast.
• 8:31
  If you want to continue this conversation, please go to our
• 8:33
  Discord sign up. It's free, it's easy, we can
• 8:37
  continue talking over there and the link is in the show notes or
• 8:40
  description. Hey, thank you so much for
• 8:48
  listening today. I really do appreciate your
• 8:50
  support. If you could take a second and
• 8:52
  hit this subscribe or the follow button on whatever podcast
• 8:55
  platform that you're listening on right now, I greatly
• 8:58
  appreciate it. It helps out the show
• 9:00
  tremendously and you'll never miss an episode.
• 9:02
  And each episode is about 10 minutes or less to get you
• 9:06
  caught up quickly. And please, if you want to
• 9:09
  support the show even more, go to patreon.com/stagezero and
• 9:15
  please take care of yourselves and each other and I'll see you
• 9:17
  tomorrow.