Growth Dragons Weekly: TikTok is ‘Worthless’ Without US Ownership, Insurance Funds Pour 100 Billion Yuan into A Shares
What happened in China this week:
#1 'TikTok is Worthless' and Could Be Sold to Musk and/or Oracle
This week marked the inauguration of Donald Trump as President of the United States, and all eyes in China are on his next moves. Two significant developments have caught attention—particularly concerning TikTok, owned by ByteDance.
The popular app was shut down over the weekend before Trump’s inauguration. True to form, one of Trump’s first executive orders was to extend TikTok’s operating permit by 75 days, giving it a temporary reprieve. However, the clock is ticking, and Trump appears to be striking a middle ground. He has indicated TikTok may continue to operate in the U.S., provided ByteDance sells at least half its stake to an American company.
As Trump bluntly put it, "TikTok is worthless, worthless, if I don’t approve it."
Two potential buyers have emerged: Elon Musk and Oracle.
Musk, fresh from privatizing Twitter and rebranding it as X, could significantly expand his influence in the social media world by acquiring TikTok. With TikTok’s 2 billion global users compared to X’s 650 million, such an acquisition would cement Musk as a formidable rival to Mark Zuckerberg’s Meta Platforms. Musk’s foray into politics and his close relationship with Trump might also give him an edge in negotiations. Leveraging this connection, Musk could easily rally funding, as many billionaires would see supporting him as a gateway to favor with Trump.
Oracle, on the other hand, offers a different angle. Traditionally a B2B-focused tech giant, Oracle currently has no consumer-facing social media presence. Acquiring TikTok would diversify its business model, providing a foothold in the lucrative B2C market. Oracle has a history with TikTok—back in 2020, during Trump’s first term, Oracle won the bid to host TikTok’s U.S. data and even attempted to acquire the app. Larry Ellison, Oracle’s founder and a Trump donor, adds another layer of political goodwill to the mix.
Interestingly, there’s even speculation about a joint bid. Musk and Ellison have a history of working together; court documents revealed Musk secured a $2 billion investment from Ellison during Twitter’s privatization. A Musk-Oracle collaboration for TikTok, therefore, isn’t entirely far-fetched. Don’t be surprised if this scenario unfolds—you heard it here first.
It is indeed true that TikTok is far better off maintaining its presence in the U.S. than losing access to this critical market. From China’s perspective, keeping TikTok operational in the U.S. aligns with its broader interest in maintaining cultural influence and a global digital presence. Selling half of TikTok to an American company offers a practical compromise for both sides. This middle ground avoids the complications of an outright sale, which failed in previous attempts, while addressing U.S. concerns about data security and ownership. For ByteDance, this deal would safeguard its foothold in the lucrative U.S. market while mitigating the risk of a complete ban.
Meanwhile, China is closely watching another front: trade tariffs. Thus far, Trump’s threats have been verbal, likely part of his negotiation tactics. While he has floated a 10% tax on Chinese imports—far lower than the 25% imposed on Canada and Mexico—China remains uneasy. This is especially true given the 25% tariff Trump imposed during his first term. The final figures will only be revealed once negotiations conclude.