Trump Favors Elon Musk or Larry Ellison Acquiring TikTok Amidst US-China Tension
President Donald Trump has expressed support for Elon Musk or Larry Ellison purchasing TikTok, offering his insights on a potential deal to preserve the platform's US operations.
Trump's Proposal
"I would be if he wanted to buy it," said Trump of Musk, the CEO of X. He also indicated his preference for Ellison, the chairman of Oracle (ORCL), to acquire the platform.
Trump proposed an arrangement involving the US granting a "permit" to the buyer in exchange for 50% ownership of TikTok. "I'd like Larry to buy it too... 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," Trump stated.
Legal Implications
Experts have raised concerns about the legality of a 50-50 joint venture, as it may not sufficiently address the law's requirements for divestiture and protection from foreign adversary control. The Protecting Americans from Foreign Adversary Controlled Applications Act bans TikTok's app unless its Chinese parent company, ByteDance, completes a "qualified divestiture" that severs its operational relationship with TikTok.
"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 Jonathan Entin, professor emeritus of law at Case Western Reserve University.
Financial Considerations
Despite the legal challenges, there are substantial financial incentives for US companies to acquire TikTok. Dan Ives of Wedbush Securities believes the platform is a bargaining chip in negotiations with China over tariffs. Trump has threatened to impose tariffs if TikTok's parent company does not approve a proposed buyer.
Potential Buyers and Bids
Ives expects numerous bids, with Musk of X as a potential frontrunner due to his perceived ability to gain China's approval. Oracle could also be involved as TikTok's existing host platform or as part of a consortium led by Musk.
Constitutional Concerns
Constitutional law experts question whether a 50-50 venture would meet legal requirements, even if the US acquires a controlling stake. "As I read the law, it requires divestiture to an American company," said Jared Carter, a constitutional law expert at Vermont Law School.
Legal Challenges
Lawyers anticipate legal challenges to any deal, including the president's 75-day executive order pausing the TikTok ban. "I would not be surprised to see legal challenges over the next 75 days," said Carter, who believes a plaintiff may question Trump's authority to delay the ban's enforcement.
Entin notes that the limited number of parties with standing to challenge the deal could provide Trump with some flexibility to realize his proposal.