TikTok's Ban Upheld By SCOTUS | Bloomberg Technology

Intro (0s)

• This is Bloomberg Technology, a program hosted by Caroline Hyde and Ed Ludlow (14s).
• The hosts of the show are Caroline Hyde and Ed Ludlow (30s).

SCOTUS Upholds TikTok Ban (35s)

• The US Supreme Court has upheld a law that threatens to shut down TikTok in the US, with the decision expected to be made by President Donald Trump, according to the White House, as the law falls under the Trump administration (48s).
• The court's decision prioritizes national security interests over free-speech arguments, stating that national security is justified in this case, despite TikTok's importance from a commerce perspective, with 170 million Americans relying on the app (1m57s).
• The decision now falls to President Donald Trump, who has taken a different posture on the issue compared to his first term, when he came out in favor of taking action against TikTok (2m4s).
• The reprieve might work under the law, with the Justice Department potentially holding back on enforcement, and the incoming administration signaling that they will not enforce the law immediately (3m32s).
• Donald Trump has expressed confidence in cutting a deal, and his incoming Attorney General is expected to enforce the law, but no movement is expected in the next few hours (3m8s).
• The next step is whether a deal gets done, with the outgoing and incoming administrations signaling that they will not enforce the law immediately, and no action is expected on January 19 (3m34s).
• ByteDance, the company behind TikTok, might decide to shut down the app on January 19, with reports suggesting that the app may go dark, and users may see a pop-up directing them to a website to talk about the ban (3m54s).
• This strategic move could mobilize 170 million Americans to protest the ban and demand action from Trump, with the potential for more luck this time around, given the incoming administration's willingness to listen to pressure (4m41s).
• The ban could have significant implications for competitors to TikTok, with Gene Munster from Deepwater Asset Management expected to provide analysis on the impact of the decision on the social media landscape (6m17s).
• The Supreme Court has upheld the ban on TikTok, but there is still uncertainty about the app's future due to potential bipartisan support and a possible reprieve from Donald Trump (6m32s).
• Despite the Supreme Court's decision, it is expected that TikTok will remain available in the US, with strong bipartisan support in April leading to 87% approval in the House and Senate (7m12s).
• The tone of the Democratic Party suggests that there is strong bipartisan support for TikTok, which could lead to the app remaining in the US (7m1s).
• For investors, a potential ban on TikTok could lead to a 5-10% tailwind for Meta if they capture 50-75% of the time spent on Instagram Reels (7m30s).
• The power of TikTok's product has influenced political decisions, and this could be a lesson for investors to look beyond TikTok for companies with similar leverage, such as NVIDIA (8m8s).
• NVIDIA is facing pressure from lawmakers to limit its sales abroad, but its strong product and influence make it hard to displace (8m23s).
• Chuck Schumer, the Minority Leader of the Senate, has suggested that a US buyer may be needed for TikTok, but it is unclear what this would mean for the app's algorithm and data (8m45s).
• It is possible that TikTok could be sold to a new owner, with potential buyers including Elon Musk, but it is also possible that the app will remain under its current ownership (9m46s).
• If TikTok is sold, the algorithm and data are unlikely to change, and the new owner would need to navigate the complex regulatory environment (9m15s).
• Donald Trump has spoken with Xi Jinping, whose blessing would be needed for any sale of TikTok by ByteDance (9m29s).
• Tech CEOs, including Elon Musk, Mark Zuckerberg, and Jeff Bezos, are planning to attend the inauguration, while the CEO of NVIDIA, Jensen Huang, is currently in Southeast Asia (12m28s).
• The CEO of TikTok will also be attending the inauguration, which could be an opportunity for the company to lobby for its interests (12m56s).
• President Biden has taken aim at the tech industry, warning of an oligarchy of extreme influence and power that threatens democracy, basic rights, and freedoms (11m35s).
• The combined net worth of Elon Musk, Mark Zuckerberg, and Jeff Bezos is $1 trillion, and they are attending a meeting with Donald Trump, who is expected to take attendance and ensure their presence, in return for which they may be seeking favorable policies or treatment from the administration (13m11s).
• Companies like Apple and social media companies are susceptible to problematic tariffs and policies, and they may be hoping to avoid these issues through their attendance at the meeting (13m26s).
• Mark Zuckerberg has taken action at Meta, reshuffling personnel and policy, and stopping fact-checking, which has been referenced by President Biden in his warning about an American oligarchy (13m39s).
• The Biden administration has put pressure on China, which has a ripple effect, and the tech industry is looking for a more strategic approach from the administration to take advantage of opportunities for US companies to succeed internationally (14m39s).
• The Trump administration is focused on working in partnership to address China, and the president-elect has already talked to President Xi about moving forward in working together (15m24s).
• The US tech leadership continues to be the economic driver of the US economy, and the industry is looking forward to a more strategic approach from the Trump administration (15m39s).
• The banning of TikTok, which has 170 million users, is a bipartisan issue due to national security concerns, and the tech industry is looking for a balanced approach that addresses these concerns while promoting US opportunities internationally (15m48s).
• The Biden administration has adopted rules around AI diffusion that restrict the ability of US companies to export AI technology, including to allied countries, which is seen as a mistake by the tech industry (16m42s).
• The tech industry is looking forward to a more balanced approach from the Trump administration, which is expected to do better on issues like AI diffusion and promoting US leadership in tech (16m58s).
• There is strong bipartisan concern about the economic power of large tech companies and how that can undermine fair competition and free speech rights, according to Lina Khan, the FTC chair (17m35s).
• The FTC chair has support from the vice president-elect, and the tech industry is looking forward to a more favorable approach to M&A in tech under the new administration (17m59s).
• Lina Khan's replacement has taken a more balanced approach, more favorable to advancing US innovation, and the president is a tech innovator who is surrounding himself with innovators coming into office (18m14s).
• The U.S. tech industry plays a vital role in economic growth, with the country running a $300 billion surplus in digital trade and exports of U.S. tech around the world (18m42s).
• The Supreme Court has upheld the law that requires TikTok to be banned or divested, with the decision expected to have little effect on competitors such as Meta and Alphabet (23m22s).
• The ban is expected to kick in on Sunday, but President-elect Donald Trump may issue an executive order to give TikTok more time to find a buyer (24m15s).
• If TikTok is not sold, it is likely to be shut down, with tech executives potentially migrating its data to competing platforms such as YouTube or Meta (20m22s).
• The migration of TikTok's data is a huge factor, as it would allow creators to keep their business running, and companies such as Oracle and Law Mart have expressed interest in buying the platform (21m6s).
• Private equity firms and individuals such as Elon Musk have also been mentioned as potential buyers, given their close relationships with President Trump and Chinese authorities (21m49s).
• The sale of TikTok's U.S. business would require the sign-off of ByteDance and China, as well as the approval of U.S. lawmakers and regulators (22m40s).
• The next 72 hours are expected to be crucial, with many unique elements at play and no clear outcome yet certain (24m7s).
• A potential buyer for TikTok has been found in Frank McCourt, the billionaire behind the Project Liberty proposal, who has expressed optimism about getting a deal done (24m56s).
• McCourt's partner recently met with Trump at Mar-a-Lago to discuss the proposal (25m13s).
• The US government is in favor of a deal to keep TikTok operational, with President Trump also wanting to get a deal done (25m36s).
• However, the main hurdle is whether ByteDance and the Chinese government will agree to sell TikTok to Frank McCourt or another buyer (25m41s).
• The US government's side is eager to see a deal happen, but it ultimately depends on ByteDance's and the Chinese government's willingness to sell (25m32s).

Tech Policy Institute Senior Fellow Sarah Oh Lam (25m55s)

• The US Supreme Court has upheld the ban on TikTok, deciding the case on its merits and the First Amendment question, finding the ban to be constitutional and content-neutral, with the court ruling unanimously in a per curiam opinion (26m22s).
• The court's decision was based on the national security concerns surrounding ByteDance's ownership of TikTok and its ties to China, with the court finding that the ban was justified by a content-neutral rationale (26m48s).
• The decision will be part of the First Amendment jurisprudence, with Justice Gorsuch expressing discomfort with the court making a big decision based on a handful of days of deliberation (27m24s).
• To alleviate the national security issue, it may be necessary for TikTok to be sold to a US buyer, although it is still unclear what changes would need to be made to the company's systems and ownership structure (28m3s).
• There was bipartisan support from Congress on the national security risks posed by TikTok, with no legislator disputing the concerns (28m42s).
• The decision has implications for American policymakers, who must make the case to young people that social media apps made in the US are preferable, while also competing with the "stickiness" of apps like TikTok (29m22s).
• The situation could become a point of leverage for Xi Jinping in his dealings with Donald Trump, although Trump is known for negotiating deals, and private buyers could potentially buy the TikTok brand and rebuild the app's infrastructure (30m4s).
• The situation raises questions about the lack of American competitors to TikTok, with apps like Snapchat and Threads not getting the same traffic, and whether the US can create a homegrown alternative to TikTok (30m46s).
• The scrutiny of social media companies has led to a balance between regulating and warning of dangers, while also promoting competition, making it an interesting moment for the tech industry (31m32s).

SpaceX's Starship Explodes During Test Flight (32m16s)

• SpaceX's rocket exploded into the sky minutes into its seventh test flight, but Elon Musk described it as "barely a bump in the road" and the company made an extraordinary catch of the Super Heavy booster (32m19s).
• Despite the explosion, SpaceX achieved its secondary objective of making the catch, but the main objective of testing the Starship in space was cut short, which is unexpected given the company's steady progress over the last couple of years (32m51s).
• SpaceX's culture is to test frequently, learn from failures, and make updates quickly, which sets them apart from other companies in the space industry, including NASA, who are more risk-averse (33m32s).
• Blue Origin made steps forward by launching for the first time on its debut flight, achieving orbit on its first launch attempt, which is an amazing accomplishment for the company, although it missed landing the rocket on the barge it was targeting (34m29s).
• Bloomberg's Loren Grush noted that it's been a wild week for space reporters, with SpaceX's explosion and Blue Origin's successful launch (34m28s).
• Palmer Luckey discussed a potential conflict with China, stating that the US is predicted to run out of munitions in the first eight days, and that Ohio was the only state that could guarantee the timeline for a new plant (35m26s).
• Bloomberg's Lizette Chapman reported on the universe of defense tech companies, noting that SpaceX has proven that companies can secure big contracts, and that Palantir also has a market cap bigger than Lockheed Martin and Raytheon (35m55s).
• Chapman highlighted a list of startups that focus on areas that will have an impact on war, including hypersonics, high-powered microwaves, and redefining warfare, all of which have been started in the past 6-8 years (36m17s).
• Scale AI, a company focused on AI and data behind warfare, is now worth $13.8 billion, and the defense tech industry is sprawling, with no single home for these companies (37m36s).
• The US Supreme Court has upheld the ban on TikTok, leaving creators and advertisers uncertain about the platform's future (39m18s).
• Many creators rely on TikTok for partnerships with brands, affiliate marketing, and selling merchandise, and are now making preparations for a potential ban (39m48s).
• Advertisers and marketers are planning for alternative platforms to shift their advertising dollars to, with some considering Chinese competitors like Rednote and Lemonade, owned by ByteDance (41m22s).
• Marketers are being cautious and making backup plans, considering all available channels where audiences are spending time (41m29s).
• The constantly evolving nature of social media platforms means that creators and influencers should not put all their eggs in one basket and should diversify their online presence (42m26s).
• Some creators are building their own websites, email lists, and owned platforms to reach their followers outside of specific platforms (42m55s).
• The lesson from the potential TikTok ban is the importance of having a diversified approach, especially when relying on platforms that are not owned by the creators themselves (43m12s).
• New tech hubs are developing in various locations, including Atlanta, Massachusetts, and Colorado, driven by factors such as high costs of living, energy, and regulatory issues in traditional tech hubs like California (38m14s).
• The potential ban on TikTok may lead to a shift in advertising dollars to other platforms, with Instagram and YouTube potentially benefiting from the change (41m8s).
• Building a business or following on a specific platform that one does not personally own comes with the risk of losing access or control, as seen in instances of platform outages. (43m23s)
• To mitigate this risk, it is essential to own one's audience by collecting emails, diversifying one's channel base, and finding ways to reach customers and audiences on other platforms. (43m49s)
• SocialFly CEO Courtney Spritzer emphasizes the importance of having control over one's audience and business in the ever-changing landscape of social media platforms. (44m1s)