Is Beijing coming up with a Musk option for TikTok?

What could plan B look like?

As TikTok faces the countdown to a possible ban in the United States, Chinese officials are reportedly coming up with an unexpected plan B: Let Elon Musk take over the popular video platform.

On paper, such an arrangement makes sense, given Beijing’s existing ties and trust in the world’s richest man. But beyond whether it could actually happen, there are a number of other issues that would need to be addressed to make it work.

Latest: Chinese officials have been debating whether the tech mogul should be allowed to invest in or buy TikTok’s U.S. operations to satisfy a U.S. law requiring sales of the app, according to Bloomberg and The Wall Street Journal.

It’s unclear whether Chinese officials have spoken with Musk or ByteDance, TikTok’s parent company. TikTok called the reports “pure fiction”.

There is a logic to such a move:

• Musk is a close ally of President-elect Donald Trump, and both have said they oppose a ban on TikTok in the United States. (The Times reports that the billionaire is expected to use office space in the Eisenhower Executive Office Building, near the White House, as part of his work for the so-called Department of Government Efficiency.) Musk has been a counterweight to China hawks in Trump’s orbit, including Sen. Marco Rubio, elected secretary of state.

• Musk also has a close relationship with Beijing, and officials there most likely feel they have influence over Musk: China accounts for about 40 percent of Tesla’s sales, a market share threatened by domestic competitors.

• For Musk, the merger of TikTok and X could greatly expand the audience of his social media empire, potentially making it more attractive to advertisers. (It would also help the contingent of investors who funded Musk’s 2022 purchase of Twitter.) And TikTok generates a huge amount of data that could be useful for training its xAI artificial intelligence models.

There are still many unknowns. Beijing would prefer to look strong in standing up to Washington, especially as Trump — who, despite opposing the TikTok ban, has talked about escalating the trade fight — prepares to take office. The Journal adds that some discussions so far have concluded that the better course of action would be to allow TikTok to be banned and then negotiate with Trump. Because the law only prevents ByteDance from update TikTok, such negotiations would give him and the White House time to reach an agreement.

It’s also unclear how Musk would finance the deal. One possibility is for him to borrow against his Tesla shares, which have soared since Trump’s victory. (It’s an option he considered — but didn’t take — when he decided to buy Twitter.)

And the deal could raise questions about Musk’s closeness to Trump and where his loyalties lie. The Tesla boss has already drawn criticism from right-wing figures such as Steve Bannon, who have accused him of prioritizing his own business interests.

HERE’S WHAT’S HAPPENING

A ceasefire deal between Israel and Hamas appears imminent, Qatar says. Mediators “succeeded in minimizing many disagreements between both sides,” paving the way for progress that would end the months-long war and lead to the release of the hostages, a spokesman for Qatar’s foreign ministry said. Investors welcomed the development, which lifted shares in the region and helped dampen rising oil prices.

Former special prosecutor says Donald Trump would be convicted if elected. Jack Smith’s report, which was released overnight despite efforts by the president-elect’s legal team to block its release, argued that Trump was essentially spared prosecution by winning re-election. Smith resigned last week, making the report a scathing critique — but little else — of Trump’s efforts to overturn the 2020 election results.

Trump’s team is reportedly considering a trickle-down approach to tariffs. One idea being floated is to use the International Emergency Economic Powers Act to introduce a schedule of gradual monthly tariffs instead of one giant strike against trading partners. Trump has vowed to impose tariffs on his first day in office, a threat that has weighed heavily on world leaders and markets.

Hollywood on hold

A week later, wildfires in the Los Angeles area continue to rage, fueled by strong winds that have put some areas on heightened alert.

Here’s the latest: More than 100,000 people were displaced and entire neighborhoods destroyed, causing a growing housing crisis. About 24 of them were killed.

The economic toll has now exceeded $250 billionestimates AccuWeather, a number that is increasing daily. This being Southern California, the entertainment industry has been hit especially hard. Bob Iger, Disney’s chief executive, told Brooks Barnes of The Times that he has taken on a new role: leading efforts to help the entertainment giant. As of Monday, 64 Disney employees have lost their homes and hundreds more, including Iger, have been evacuated.

The entertainment industry is a large regional employer with about 27 percent of the nation’s film and television workers employed in Los Angeles County, according to one study tabulated after the paralyzing strikes in Hollywood in 2023. Work at many studios has ground to a halt as executives, agents and talent focus on destroying their homes and neighborhoods.

The good news: almost all studio infrastructure in Los Angeles is secure. Sony Pictures, Paramount Pictures, Netflix, Warner Bros. and Universal Pictures are either far from the fires or largely untouched by the fires.

But the industry is divided over whether business should continue as normal. On Monday, most studios were open, and The Recording Academy announced that the Grammy Awards will be broadcast on February 2 as planned. The Academy of Motion Picture Arts and Sciences has extended the voting period for Oscar nominees, but said the March 2 ceremony date still stands. That’s after studios last week postponed movie premieres and shows including “Jimmy Kimmel Live!” broadcast replays.

Will the fires accelerate the decline of the film business in Los Angeles? States like Georgia and Illinois have invested billions in tax breaks to lure productions away from Hollywood. And live feature films are almost all shot outside the region these days. In response, Gov. Gavin Newsom proposed last year that the state double tax incentives for filming to $750 million annually.

Faced with such destruction, some industry players are asking tough existential questions. “It’s become a business where the buildings are located in Los Angeles, but a lot of the work is done elsewhere,” Terry Press, a veteran film marketer and former president of CBS Films, told The Times. She added: “Wouldn’t you go where the work is? And what will that mean for the vibrancy of this community?”

Exclusive: AI coding start-up raises $105 million

Investor enthusiasm for all things artificial intelligence shows no signs of abating even as the technology emerges as a flashpoint in trade wars. The latest example: Anysphere, whose Cursor product helps developers automate writing code, has raised about $105 million, DealBook’s Michael de la Merced first reported.

The new round values ​​Anysphere at $2.5 billion, a roughly six-fold jump from what was ordered in May.

The flood of investor interest in AI continues to drive up valuations and round up sizes. In recent months, OpenAI has raised $6.6 billion at a staggering $157 billion valuation. Last month, data company Databricks raised $10 billion at a $62 billion valuation.

Anysphere’s new round was led by Thrive Capital, which invested in OpenAI and Databricks, and Andreessen Horowitz. Benchmark also participated.

Backers point out how quickly Cursor’s user base has grown. Anysphere now has more than $100 million in annual recurring revenue, according to Michael Truell, the company’s co-founder and CEO. Miles Grimshaw, a partner at Thrive who helped lead the new investment round, said that almost every portfolio company at his firm has used Cursor . (Anysphere is also used by developers at about half of the Fortune 1000 companies, Truell added.)

“We’ve never seen a company achieve such broad and rapid adoption, let alone such deep technical depth,” Martin Casado, a partner at Andreessen Horowitz who sits on Anysphere’s board, added in a statement.

Automated code writing is becoming a very competitive sector. Other companies, including Codeium, Poolside, and Sourcegraph, offer competing products; Microsoft’s GitHub also offers Copilot to help with code creation.

But Truell and Grimshaw pointed to Anysphere’s ambitions, including an update to the tab auto-completion feature that allows Cursor to predict up to the next 10 minutes of a user’s lines of code.

Tech moguls have higher hopes for the technology: Mark Zuckerberg, CEO of Meta, said recently on “The Joe Rogan Experience” that his company will start automating some of the code writing. The aspiration is for AI to write all the code for its applications.

A conglomerate without CEOs

It’s not every day that a company announces the departure of its CEO without naming an interim or replacement. Yet that’s what IAC did on Monday, saying Joey Levin is leaving the company to oversee spinoff Angi as executive chairman of the home services platform.

IAC is not naming a replacement for Levin: The remaining C-suite executives will report to Barry Diller, IAC’s chairman. What could be at play?

That’s how IAC works. Diller’s media empire is an unusual holding company that buys companies, tries to improve them and then dumps the best ones. His companies, including Dotdash Meredith and Care.com, are essentially run as individual entities with their own CEOs

IAC has already done this. When IAC’s previous boss, Greg Blatt, stepped down in 2013 to become president of Match Group — which was also spun off — the company didn’t immediately name a replacement, either. He appointed Levin as CEO in 2015.

Here’s what Levin wrote about Diller in an internal memo: “He never saw a plan ambitious enough. He has never seen a good enough product or a good enough story told. And as a result, he made many of us think bigger and better.”

QUICK READING

offers

• The chief executive of US steelmaker Cleveland-Cliffs has suggested he may make a new offer for US Steel as part of its planned sale to Nippon Steel teeters, although he did not offer details. (NYT)

• Honeywell International, a major industrial conglomerate, is reportedly planning to split in two after pressure from activist investor Elliott Investment Management. (Bloomberg)

Politics, policy and regulation

• Robinhood paid $45 million to settle SEC allegations that the brokerage violated securities rules, including protecting sensitive customer data and failing to report suspicious transactions. (NYT)

• “In the precipice of the global market, Britain is the ‘weakest link'”

• Harvard has hired Ballard Partners, a lobbying firm run by a major Trump donor that also hired Susie Wiles, the new White House chief of staff, to lobby for the Washington university. (Washington Free Beacon)

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