President Donald Trump said he is in favor of Elon Musk or Larry Ellison buying TikTok as he offered his latest thinking on what a deal might look like to save the US operations of the social media platform.
"I would be if he wanted to buy it," Trump said of Musk, the owner of X, when asked by a reporter at the White House if he was in favor of such a deal.
The arrangement the president said he was considering involves the US providing a "permit" in exchange for half of TikTok.
"I have the right to make a deal," he said. "So what I’m thinking about saying to somebody is buy it and give half to the United States of America, half, and we’ll give you the permit, and they’ll have a great partner.”
Ellison said, "It sounds like a good deal to me, Mr. President."
The new comments provide more detail about prior Trump suggestions that the way to solve the TikTok situation was a 50-50 "joint venture" where the US gets half. TikTok's parent company is Chinese, and China would need to sign off on any such deal.
U.S. President Donald Trump speaks next to Oracle co-founder Larry Ellison, SoftBank CEO Masayoshi Son, and OpenAI CEO Sam Altman after delivering remarks on AI infrastructure at the White House in Washington. REUTERS/Carlos Barria ·Reuters / Reuters
There are many reasons why a joint venture might be a bad idea from a legal standpoint, according to experts who said such a partnership wouldn’t be enough to undo a ban of the social media platform that began the day before Trump took office.
"I don't know necessarily that Trump has thought this all the way through," said Jonathan Entin, professor emeritus of law at Case Western Reserve University.
But for Trump and any US companies that want a piece of the popular platform, there may be plenty of financial reasons in favor of it.
Dan Ives, global head of tech research at Wedbush Securities, said in a note that TikTok "is a chip on the poker table" in a much bigger set of negotiations with China over the possibility of tariffs.
The president on Monday floated the idea of imposing tariffs on China if they don't approve a proposed buyer for TikTok's US assets. At a rally he indicated TikTok parent ByteDance would turn over half of the company so that he would allow it to keep operating.
"Whether you like TikTok or not, we’re going to make a lot of money," he said.
Ives expects 10-15 bids, with X owner Musk in the driver’s seat to win any approval from Beijing. Oracle, he said, could be involved, given that it does act as a host for the social media platform. It could also go to a consortium that Musk could build.
On Sunday, Musk said on X, “I have been against a TikTok ban for a long time, because it goes against freedom of speech. That said, the current situation where TikTok is allowed to operate in America, but X is not allowed to operate in China is unbalanced. Something needs to change.”
Would such a venture keep TikTok operating in the US? It’s not clear.
Constitutional law experts say an equal partnership likely does not do enough to meet the law’s demands, even if the US were to acquire a controlling stake.
That statute — the Protecting Americans from Foreign Adversary Controlled Applications Act — bans TikTok’s app nationwide unless its Chinese-owned parent company, ByteDance, completes a "qualified divestiture."
A qualified divestiture is one that severs ByteDance’s "operational relationship" with TikTok and leaves the divested company free of "any formerly affiliated entities that are controlled by a foreign adversary."
"As I read the statute, the idea is to get that foreign connection off the table, and a joint venture doesn't seem like it would do that,” said Entin.
Nicholas Creel, a business law professor at Georgia College & State University, said so long as foreign nationals from adversary countries own 20% or more of TikTok, or have any significant control over access to its data or algorithm, the app must be banned.
Elon Musk arrives to speak at an indoor presidential Inauguration parade event in Washington on Monday. (AP Photo/Matt Rourke) ·ASSOCIATED PRESS
"The only way to change that is for Congress to pass a new law changing that rule," Creel said.
Jared Carter, a constitutional law expert and Vermont Law School professor, said he would eventually expect to see challenges if a 50-50 deal were struck between the US and ByteDance.
"As I read the law, it requires divestiture to an American company,” Carter said, adding that a 50-50 split would also violate the spirit of the law, which requires divestiture due to national security concerns.
Other legal challenges could come before any deal is made, the lawyers said. The president on Monday issued an executive order that pauses enforcement of the ban for the next 75 days, giving him time to find a buyer.
"I would not be surprised to see legal challenges over the next 75 days," Carter said. He suspects a plaintiff to question the president’s authority to issue the executive order delaying enforcement of the TikTok ban.
If challenged, Creel said, the order is “highly likely” to be struck down because it goes outside the confines of the law, which explicitly requires the US attorney general to enforce the ban and permits delays only if “substantial progress” toward divestiture has been made.
However, the limited number of parties that could legally challenge a 50-50 venture could mean Trump has some wiggle room for his idea to become a reality, Entin said.
Entin explained that parties with standing — or a right to challenge — would include Congress and TikTok’s competitors, such as Meta’s Instagram and X.
"Who's going to challenge this?” he asked. "Usually, you've got to have a party that is legally harmed."
