One quick thing: North Korea responsible for WazirX's $235-mn crypto hack, say US, Japan, South Korea

In today’s newsletter:

• China mulls sale of TikTok US to Elon Musk
• MeitY likely to extend consultation period on DPDP rules
• Fintechs dominate personal loan disbursements in FY25

Was this newsletter forwarded to you? You can sign up for Tech3 here

As a TikTok ban looms in the US, Chinese officials are reportedly discussing a Plan B. And of course, the mercurial tech billionaire Elon Musk is in the mix.

Chinese government officials are considering an option of selling TikTok's US operations to Musk's X (formerly Twitter), which will run the businesses together, according to a Bloomberg report.

• This move is said to be part of a broader effort to collaborate with the incoming Donald Trump's administration (Or perhaps just a trial balloon, for all we know)

• Musk, who has become one of Trump's closest allies in recent months, has certain appeal for the Chinese government due to their business ties. China is the second-largest market for Tesla and its Shanghai Gigafactory is the company's largest factory in the world

The move, if it materialises, could significantly boost X's efforts to become a video-first platform and attract more advertisers—something it has struggled with over the past year.

• It could also open another battlefront with a rival (or now frenemy?) Mark Zuckerberg, with Meta-owned Instagram, expected to benefit the most from the ban

• Musk's AI startup xAI could also benefit from the massive amount of data generated from TikTok for training its AI models

The deal with Musk is one of the scenarios being discussed, though China strongly prefers that TikTok remain under ByteDance’s ownership, the report said. TikTok has denied this move, calling it "pure fiction."

• The government has also not discussed their contingency plans with ByteDance, according to The Wall Street Journal. It is also not clear whether Chinese officials discussed these plans with Musk

Trump, who first pushed to ban TikTok during his previous term in 2020 and even attempted to force its sale, is now opposing the ban. 

• He has also pledged to 'save' the app and has asked the Supreme Court to delay its implementation, which is set for January 19—a day before he takes office. 

Will he be able to save TikTok? We’ll know next week.

A 'straight B+'... 

…was the assessment given by a foreign industry executive when asked about the draft Digital Personal Data Protection (DPDP) Rules, indicating that although the rules have a lot of good provisions, they have also evoked concerns from industry and civil society.

• With these concerns in mind, the IT ministry today held the first consultation meeting on the rules in New Delhi

Given the submissions made by industry during the two-hour meeting, it is expected that the consultation period will be extended beyond February 18.

• Focus groups may also be formed to address concerns regarding specific provisions of the rules

The concerns and points raised during the discussion primarily pertained to:

• Restrictions surrounding processing of children’s data: How to verify children?
  
  
• Ambiguity over restrictions on transferring of personal data beyond the country’s boundaries
  
  
• Consent manager framework: What will be the business model?
  
  
• Obligations for significant data fiduciaries – entities which process large amounts of data

 IT minister Ashwini Vaishnaw who attended the meeting said that the government has taken note of all points. 

“We have assured that the consultation process will be as extensive as it can be,” the minister said. 

Meanwhile, global tech industry representatives are seeking clarity from the government regarding the data transfer restriction requirements. 

“Ambiguity around certain provisions.. could deter investment or product launches in India," Jacob Gullish of US-India Business Council (USIBC) said.

Dig deeper

The Indian personal loan market is undergoing a seismic shift.

• Fintechs have emerged as the dominant players, now responsible for over three-quarters of all personal loans sanctioned in the first half of the current fiscal

The Reserve Bank of India (RBI), the banking and financial sector regulator, has been urging lenders to reduce their exposure to unsecured lending, a category that includes personal loans. Banks appear to be taking this directive seriously.

• Fintechs grew the number of loans at 0.35%

• Banks saw their sanctioned PLs decline by 21%

• Consequently, fintechs saw their share grow by 9 percentage points

But to put the volume in context, the average loan value of fintechs was around Rs 9,200. 

The same figure for banks was around Rs 4.4 lakh. The cumulative value of all fintech loans was around 12% during the first half of FY25.

• Fintechs disbursed more than 80% of loans under Rs 1 lakh

• Credit bureaus suggest rising indebtedness among borrowers taking loans below Rs 50,000

• Within 2 years, the number of personal loans (PLs) for this cohort is 3.5 PLs per person

Dig deeper

• Bengaluru Metro Rail Corporation Ltd plans to use artificial intelligence and drones to monitor the safety of concrete structures, including viaducts and pillars.
  
  
• The US is expanding export restrictions on advanced computer chips and AI technology to include dozens of countries beyond its traditional list of adversaries.
  
  
• OpenAI said in its "Economic Blueprint" that the US must attract foreign investment, implement supportive regulations, and prioritize access to chips, data, and energy to maintain its AI leadership over China.

The Oscars are officially hotter than ever.

• With Los Angeles ablaze, the Academy has once again delayed its nominations announcement, pushing the reveal back to January 23

The Academy has also canceled the annual Oscar nominees' luncheon, originally scheduled for February 10. However, the Academy Awards telecast remains set to air on March 2. More on that here 

Note: By subscribing to Tech3 you have already made the right choice. Top it up with a premium offering, the Moneycontrol Pro Panorama, newsletter that gives you a sharp take on macros, markets, business and finance. Sign up for Pro from this link to get this newsletter in your inbox and also a host of content enjoyed by over a million subscribers.