TikTok Buyout: Trump Endorses Elon Musk or Larry Ellison as Potential Buyers

President Trump's Latest Proposal

President Donald Trump has expressed support for potential acquisitions of TikTok by Elon Musk or Larry Ellison, offering insights into his preferred structure for safeguarding the platform's US operations.

"I would be [in favor] if he wanted to buy it," Trump said of Musk, CEO of X, in response to a reporter's query at the White House.

He added, "I'd like Larry to buy it too," with Oracle Chairman Larry Ellison present at the press conference announcing a substantial AI infrastructure commitment.

Trump outlined a proposal involving a "permit" from the US in exchange for half of TikTok. "I have the right to make a deal," he stated. "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 responded with, "It sounds like a good deal to me, Mr. President."

Joint Venture Considerations

Trump's comments elaborate on earlier suggestions that a 50-50 "joint venture" might resolve the TikTok situation, with the US acquiring half ownership. However, experts caution that such a structure may not be legally sufficient to lift the ban enacted shortly before Trump took office.

Jonathan Entin, law professor emeritus at Case Western Reserve University, observes, "I don't know necessarily that Trump has thought this all the way through."

Nonetheless, financial incentives for US companies seeking a stake in TikTok remain substantial.

Oracle's Potential Involvement

Dan Ives of Wedbush Securities suggests that TikTok "is a chip on the poker table" in broader negotiations with China regarding potential tariffs. Trump has floated the idea of imposing tariffs if China does not approve a proposed buyer for TikTok's US assets.

Ives predicts numerous bids, with Musk's X potentially leading the pack for Beijing's approval. Oracle's role could involve hosting the social media platform or participating in a consortium led by Musk.

Legal Challenges to a Joint Venture

Constitutional law experts express doubts about whether an equal partnership would satisfy legal requirements, despite US acquisition of a controlling stake. The Protecting Americans from Foreign Adversary Controlled Applications Act mandates a "qualified divestiture" that severs ByteDance's "operational relationship" with TikTok and eliminates ties to "formerly affiliated entities controlled by a foreign adversary."

Entin emphasizes, "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."

Nicholas Creel, business law professor at Georgia College & State University, points out that a 20% or greater foreign ownership or control over data or algorithm necessitates a ban.

Jared Carter of Vermont Law School predicts challenges to a 50-50 deal between the US and ByteDance, arguing that the law requires "divestiture to an American company" and that a 50-50 split would violate its intent.

Other Legal Concerns

Legal obstacles could arise before any transaction takes place. Trump's executive order pauses ban enforcement for 75 days, providing time to identify a buyer.

Carter anticipates legal challenges to the executive order's authority to delay enforcement. Creel deems the order "highly likely" to be struck down, as it exceeds the law's scope, which requires divestiture enforcement by the US attorney general and permits delays only upon "substantial progress" toward divestiture.

However, Entin suggests that limited parties with standing to challenge the 50-50 venture may provide Trump with latitude to pursue his proposal. These parties could include Congress and TikTok competitors like Meta's Instagram and X.

"Who's going to challenge this?" Entin asks. "Usually, you've got to have a party that is legally harmed."