China is exploring several alternative strategies, including this contingency plan, in response to the U.S. Supreme Court's consideration of a mandate requiring ByteDance, TikTok's parent company, to divest its U.S. operations by January 19, according to anonymous sources.
If the deadline passes without compliance, third-party internet service providers could face penalties for facilitating TikTok's activities in the United States.
Should the plan move forward, Musk would manage both X, which he currently owns, and TikTok's U.S. operations, as reported by Bloomberg. However, officials from the Chinese government have not yet made a definitive decision regarding the implementation of this plan, which remains in its early stages.
It remains uncertain whether ByteDance is aware of the Chinese government's intentions or of TikTok and Musk's potential roles in these discussions. Senior Chinese officials are reportedly engaged in discussions about TikTok's future in the U.S. as part of broader negotiations involving President-elect Donald Trump.
A spokesperson for TikTok stated in an email to CNBC, "We can't be expected to comment on pure fiction." X has not yet responded to a request for comment.
Last week, the Supreme Court conducted oral arguments concerning the law that could lead to TikTok's ban, which was signed by President Joe Biden in April. TikTok's legal representatives contended that the law infringes on the free speech rights of millions of U.S. users, while the U.S. government argued that ByteDance's ownership of TikTok presents a national security threat.
The Supreme Court's apparent alignment with the executive branch may prompt TikTok to seek support from former President Trump upon his potential return to office. While he previously advocated for a TikTok ban, his position has evolved, recently urging the Supreme Court to delay enforcement of the current administration's ban to allow for a "political resolution." This shift in stance followed a February meeting with Mr. Jeff Yass, a major Republican donor and investor in both ByteDance (TikTok's parent company) and Truth Social.