Speaker 1: From the heart of where innovation, money and power collide
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York. I'm Caroline Hyde and.
Speaker 3: I'm Mike Sheppard in Washington. This is Bloomberg Technology and.
Speaker 4: Today's key story, the Supreme Court upholds the law that
Speaker 4: threatens TikTok's shut down in the United States. We get
Speaker 4: straight to breaking news coming from CNN, reports that Trump
Speaker 4: will indeed make a decision on TikTok, and even the
Speaker 4: White House saying that the TikTok action falls into the
Speaker 4: Trump administration. According to Reuter's Bloomberg's Ben Main, this is
Speaker 4: all perfectly obvious in many ways, and the decision was
Speaker 4: as expected. But then take us to the letter of
Speaker 4: the law here. Ultimately, this cannot be distributed by the
Speaker 4: likes of the app stores.
Speaker 2: And it cannot be supported by Oracle and others.
Speaker 5: So that's right, and I think in looking at the
Speaker 5: decision specifically, the Court was very clear about the national
Speaker 5: security interest that Congress laid out in passing this law
Speaker 5: and President Biden signing it as being more important or
Speaker 5: the most important thing when considering whether to let this
Speaker 5: law stand versus the arguments that from a free speech perspective,
Speaker 5: TikTok is important, and certainly from a commerce perspective, for
Speaker 5: the whatever percentage of one hundred and seventy million Americans
Speaker 5: that use this app, they need to rely on it.
Speaker 5: So essentially, the Supreme Court went ahead today and said
Speaker 5: national security, this argument is justified here. And now it
Speaker 5: does fall to Donald Trump, and remembering back to his
Speaker 5: first term, this is a very different posture that he's
Speaker 5: taking here. He and his administration came out in favor
Speaker 5: of taking action against TikTok during his first term, and
Speaker 5: now we're seeing a very different position here, and we're
Speaker 5: going to see what happens Monday.
Speaker 3: So, Ben, your team has been covering the TikTok legal
Speaker 3: saga for months now, ever since they filed their claim
Speaker 3: back in May. But the story is not over. Talk
Speaker 3: a little bit about how the reprieve might work under
Speaker 3: the law and what the Justice Department perhaps could do
Speaker 3: to hold back on enforcement, at least at first.
Speaker 6: Exactly so effectively.
Speaker 5: Now that this law is on the books, I mean
Speaker 5: it was on the books, but now that it's going
Speaker 5: to stay on the books, it falls to the executive
Speaker 5: branch and the president, and certainly the Justice Department and
Speaker 5: Donald Trump's incoming Justice Department and Attorney General.
Speaker 6: To enforce it.
Speaker 5: What we understand is that Donald Trump very much wants
Speaker 5: to cut this deal. He has said that he is.
Speaker 5: In his brief that was a Friend of the Court
Speaker 5: brief filed a few weeks ago, he said he's the
Speaker 5: person who can cut this deal once he takes office.
Speaker 5: So I don't think we're going to see any movement
Speaker 5: necessarily in the next few hours or the next day
Speaker 5: or two. But Donald Trump, once he comes in, has
Speaker 5: made clear that he wants to get this done. He
Speaker 5: wants to figure out a solutionaire and he thinks he
Speaker 5: can do it. Like he has expressed the ability and
Speaker 5: confidence in himself to do many things, this is one
Speaker 5: of them he thinks he can get done. So the
Speaker 5: next step is essentially whether a deal is going to
Speaker 5: get done. That both the outgoing Biden administration and the
Speaker 5: incoming Trump administration have signaled they are not going to
Speaker 5: enforce this ban immediately, so we're not going to see
Speaker 5: January nineteenth, the Biden administration Justice Department really taking any
Speaker 5: action and we're not expecting to see the Trump administration
Speaker 5: do anything when they take office on Monday as well.
Speaker 4: Bloom Meg's Ben Main we thank you, but well, could
Speaker 4: TikTok and bite douts decide to do on the nineteenth
Speaker 4: We turn to bluem Meg's Alexandra Levine for that, alex
Speaker 4: they could decide that we can't use it, and indeed
Speaker 4: the infrastructure might not be there to support it absolutely.
Speaker 7: So, we've seen reports that TikTok is thinking of just
Speaker 7: shutting the app off, making it go dark on its own,
Speaker 7: and we heard some references during the Supreme Court hearing
Speaker 7: last week to TikTok going dark, and it didn't quite
Speaker 7: make sense because we knew TikTok was never going to
Speaker 7: go dark immediately, because once Apple and Google and Oracle
Speaker 7: begin to stop hosting and distributing the platform, we knew
Speaker 7: that what it would be would be a slow deterioration
Speaker 7: for people who use the app, not in immediate going dark.
Speaker 7: What we've heard in reports though more recently, is that
Speaker 7: TikTok made to shut the whole thing off come Sunday,
Speaker 7: and that users who open the app may see some
Speaker 7: kind of a pop up that directs them to a
Speaker 7: website to talk about the ban. And it's a really
Speaker 7: fascinating strategic move if that does come to pass, because
Speaker 7: I think it would really mobilize one hundred and seventy
Speaker 7: million Americans, which is roughly half the country, to be
Speaker 7: angry about this, to protest it, and then to of
Speaker 7: course demand action from Trump and his new team to
Speaker 7: do something about it.
Speaker 3: Alex, those protests didn't succeed in getting the ban staved
Speaker 3: off back in March and April when it was going
Speaker 3: through Congress. Do we think they'll stand a better chance
Speaker 3: this time around with the incoming Trump administration those kinds
Speaker 3: of appeals.
Speaker 7: I do think these kinds of appeals could have more
Speaker 7: luck this time. You know, when TikTok mobilized its very
Speaker 7: dedicated base to call Congress right when the law was
Speaker 7: introduced to try to prevent them from passing it, it
Speaker 7: actually stoked lawmakers' fears even more about the potential for
Speaker 7: the app to create outrage, to create discord, to really
Speaker 7: anger lots of Americans, and it actually drove home the
Speaker 7: point for them that they needed to do something about
Speaker 7: the app in this case, now that Trump has campaign
Speaker 7: on the app, he credits the app potentially with him
Speaker 7: reaching many young voters that he thinks moved the needle
Speaker 7: for him. I think he's going to be a much
Speaker 7: more willing audience for any kinds of pressure. And we're
Speaker 7: already seeing creators who, for example, were live streaming outside
Speaker 7: the Supreme Court last week. Who are you know sending
Speaker 7: the message? Trump campaigned on promising that he would help
Speaker 7: us with the app. He would say if he would
Speaker 7: resuscitate it, and now we're going to hold him to
Speaker 7: his word on that.
Speaker 3: Bloomberg's Alexandra Levin, thank you so much. Let's bring in
Speaker 3: Gen Munster now from Deepwater Asset Management. Gene talk us
Speaker 3: through what this means for all the competitors out there
Speaker 3: to TikTok. If you're an investor looking to trade this,
Speaker 3: it is murky. You have the Supreme Court in upholding
Speaker 3: this ban, and yet you have Donald Trump saying he
Speaker 3: may give the company a reprieve. What is an investor
Speaker 3: or trader to do now?
Speaker 8: Well, Meta Trader deep Water we own Meta, and as
Speaker 8: an owner of Meta, we're expecting that this ban is
Speaker 8: not going to be upheld at the end of the day.
Speaker 8: This even though despite what's happened with the Supreme Court.
Speaker 8: I think that writing is clearly on the wall. TikTok
Speaker 8: is going to remain, and the big change wasn't about
Speaker 8: the Supreme Court largely doesn't matter. What matters is the
Speaker 8: tone on the Democratic Party. And I think that that
Speaker 8: speaks to what is a strong bipartisan support back in
Speaker 8: April eighty two, eighty seven percent the House and Senate support.
Speaker 8: Typically a bill gets passed around fifty five percent, So
Speaker 8: this is unprecedented bipartisan support that is now shifting. And
Speaker 8: I think that for an investor, from investor standpoint, I
Speaker 8: think that one piece is just for meta that we're
Speaker 8: expecting kind of a five up to a ten percent
Speaker 8: tailwind if they would have captured fifty seventy five percent
Speaker 8: of that time spent on Instagram reels. And so I
Speaker 8: think I'll start there, Mike Is. I think that that's
Speaker 8: from investor piece. There's another lesson here for investors that
Speaker 8: go well beyond what's happening with TikTok. And there's no
Speaker 8: other app in the world that I can imagine that
Speaker 8: could cause this kind of uprise, And the reason is
Speaker 8: it is the power of a strong product an addictive
Speaker 8: product and the power of I think people in this
Speaker 8: case that product influencing political decision. And so what does
Speaker 8: that mean for broader investing is that companies that have
Speaker 8: that leverage, and in Nvidia, for example, it's just really
Speaker 8: hard to displace.
Speaker 4: Really interesting considering the pressure in video is putting on
Speaker 4: the next set of potential laws coming its way to
Speaker 4: limit its selling abroad. Gene this about face of lawmakers,
Speaker 4: this bipartisanship of against TikTok to now suddenly everyone wanting
Speaker 4: to see it continue. How does that materialize in the
Speaker 4: next few days. I know it's hard to discern, but
Speaker 4: Chuck Schumer, of course, minority leader in the Senate saying
Speaker 4: we need to find a US buyer. What does that
Speaker 4: mean for the addiction of the algorithm with a new owner.
Speaker 8: Well, first of all, I don't think it's going to
Speaker 8: there will be a new owner. I think that ultimately
Speaker 8: what will happen is this is going to go back
Speaker 8: to some sort of House and Senate vote, and I
Speaker 8: think that it actually will h TikTok will be allowed
Speaker 8: to remain. I think that there's just that much political pressure.
Speaker 8: What we saw from buying today was I think evidence
Speaker 8: of how strong that political pressure is. If I'm wrong
Speaker 8: and there's ultimately a sale, that algorithm effectively doesn't change.
Speaker 8: I think the question wasn't whether or not, from a
Speaker 8: logistics standpoint, whether the algorithm would change, as where as
Speaker 8: that data ultimately go. And so I don't think that
Speaker 8: that piece changes.
Speaker 3: Jane, we saw that Donald Trump spoke today with Chinese
Speaker 3: President Xi Jianping, whose blessing would be needed ultimately for
Speaker 3: any sale of the app by byte Dance. Do you
Speaker 3: see any buyers emerging, perhaps including Elon Musk, whose name
Speaker 3: has been floated in Chinese circles.
Speaker 8: So I'm wrong, and this does go the route of
Speaker 8: a sale, Elon's a buyer. I think there can be
Speaker 8: other constituents. You could see groups potentially telcos involved with
Speaker 8: a sale. We've seen them start to venture into things
Speaker 8: like this, of course Megacap, and maybe they've got some
Speaker 8: more room with closer relationship that Megacap has had with
Speaker 8: the Trump administration. So something along those lines, and so
Speaker 8: I mean something will come on. It's worth probably fifty
Speaker 8: to one hundred billion dollars somewhere in that range, which
Speaker 8: for these companies is a very doable ticket. So again,
Speaker 8: I think that TikTok users should rest easy because they're
Speaker 8: going to get their product. They're going to get to
Speaker 8: continue their product, whether it's in the current form or
Speaker 8: just under some new leadership.
Speaker 4: Wow, up to one hundred billion, Gene Munster, It's been
Speaker 4: great to have you from deep Water Asset Management. Thank
Speaker 4: you coming up as tech CEOs. They flock tomorrow lago
Speaker 4: and then to the inauguration. How will industry policy change
Speaker 4: under the upcoming Trump administration? Jason Oxman's joining us on
Speaker 4: the Information Technology Industry Council. That's next. Meanwhile, keep a
Speaker 4: close eye on Intel shares. We digress from TikTok for
Speaker 4: but a moment. Shares rising after a report from a
Speaker 4: website called semi accurate and semi being of course about semikinductors.
Speaker 4: But he said the company will be potentially an acquisition target.
Speaker 9: But this is Bloomberg Technology.
Speaker 6: Today.
Speaker 8: An oligarchy is taking shape in America of extreme.
Speaker 3: Wealth, power and influence that literally threads our entire democracy.
Speaker 2: Are basic grades in freedoms.
Speaker 4: President Biden, speaking from the Oval Office on Wednesday, taking
Speaker 4: aim at what he calls a tech industrial complex.
Speaker 2: While he didn't name anyone.
Speaker 4: In particular, several of the biggest names in the industry
Speaker 4: have donated millions to President Trump's inaugural fund and plan
Speaker 4: of course, to attend the ceremony on Monday. Bloomberg's Kaylee
Speaker 4: Lines is in Washington with more and well. One key
Speaker 4: partner of his throughout the campaign and donating millions was
Speaker 4: Elon Musk, and now many more follow suit.
Speaker 2: Kaye. Who will be there on Monday, Well, it's a
Speaker 2: laundry list, Carolina.
Speaker 10: A lot of wealth is going to be not just
Speaker 10: at the inauguration, but physically on the platform with Donald
Speaker 10: Trump as he takes the oath of office, seated next
Speaker 10: to the likes of a senior members of Congress, cabinet secretaries,
Speaker 10: and even former presidents. Elon Musk, of course, who you're
Speaker 10: referring to. They're the world's richest man, but the second
Speaker 10: and third richest man men according to the Bloomberg Billionaires Index,
Speaker 10: will also be there. Mark Zuckerberg and Jeff Bezos will
Speaker 10: be in attendance. Tim Cook, the CEO of Apple, also
Speaker 10: according to our reporting, is planning to attend. One notable
Speaker 10: exception maybe is the CEO of Nvidia, Jensen Wong that's
Speaker 10: just a travel thing. He's currently in Southeast Asia. But
Speaker 10: by and large, this is going to be a huge
Speaker 10: who of big technology and noteworthy, especially given the news
Speaker 10: today the TikTok band being upheld by the Supreme Court.
Speaker 10: The CEO of TikTok, Show Chew, will also be an inauguration,
Speaker 10: though we've been told that he's just attending. He won't
Speaker 10: actually get one of those prize seats up on the platform.
Speaker 10: But that platform is going to be stacked with a
Speaker 10: lot of wealth.
Speaker 2: Just those three.
Speaker 10: Individuals Musk, Zuckerberg, and Bezos together collectively have a net
Speaker 10: worth of nearly one trillion.
Speaker 11: Dollars, Kaylee.
Speaker 3: With Donald Trump taking attendance in a way and making
Speaker 3: sure that all of these industry allies and billionaires are
Speaker 3: there in his court, what are they looking for from
Speaker 3: him in return?
Speaker 10: Well, you can take for example, Tim Cook, because we've
Speaker 10: actually seen this in the first Trump administration. Apple would
Speaker 10: be highly susceptible to potentially problematic tariffs on things like
Speaker 10: China that would have drastic impact on the iPhone. So
Speaker 10: there are policies in which they are hoping they might
Speaker 10: be able to avoid negative impact. And the same goes
Speaker 10: for social media companies. We've already seen Mark Zuckerberg taking
Speaker 10: action at meta reshuffling, personnel reshuffling policy as well as
Speaker 10: they've stopped fact checking or they're going to be pulling
Speaker 10: back on it. And we've heard from President Biden in
Speaker 10: his Oval Office address there. Yes he didn't name Mark
Speaker 10: Zuckerberg directly, but in his warning about a burgeoning American oligarchy,
Speaker 10: he specifically referenced social media companies pulling back on fact checking.
Speaker 2: So it was only so veiled.
Speaker 10: So a large part of this is trying to make
Speaker 10: sure that big tech can see its interest aligning with
Speaker 10: the president, who has not been shy about targeting some
Speaker 10: of these companies in the past.
Speaker 3: Right Bloomberg's Kaylee lines, thank you so much. Here with
Speaker 3: more on tech policy under the incoming Trump administration is
Speaker 3: Jason Oxman, President and CEO of the Information Technology Information
Speaker 3: Technology Industry Council. Jason, thank you for joining us today. Jason.
Speaker 3: We wanted to talk to you a little bit more
Speaker 3: about trade and your concerns there. This is something that
Speaker 3: your group has singled out as an area of priority
Speaker 3: and of concern. The Biden administration has put a lot
Speaker 3: of pressure in particular on China, but that has a
Speaker 3: ripple effect.
Speaker 10: Talk about that a little.
Speaker 11: What we're really looking for and enthusiastically looking for from
Speaker 11: the Trump administration is more of a strategy that takes
Speaker 11: advantage of opportunities for US companies to succeed internationally. Leadership
Speaker 11: and technology. That's what the US is known for, and
Speaker 11: what we've seen in the Biden administration, unfortunately, is a
Speaker 11: lack of strategy, an inability to match the significant and
Speaker 11: serious national security interests with economic activity that promotes US
Speaker 11: opportunities internationally. So on trade, our excitement and enthusiasm about
Speaker 11: the Trump administration is they're very focused on working in
Speaker 11: partnership to address the China question. And we've seen the
Speaker 11: President elect already talk to President she about the strategy
Speaker 11: for dealing with that, about moving forward, working together. What
Speaker 11: we want to make sure happens US technology leadership continues.
Speaker 11: The economic driver of the US economy is technology, so
Speaker 11: we can make sure that trade becomes a real opportunity
Speaker 11: for further growth.
Speaker 4: Jason, do we not need, though, acts like a potential
Speaker 4: banning of a significant social media app that touches one
Speaker 4: hundred and seventy million users to ensure national security. That
Speaker 4: was bipartisan in nature, and yes, Trump might come in
Speaker 4: and have a conversation with she about it, but ultimately
Speaker 4: this was bipartisan in nature because of national security concerns.
Speaker 11: The TikTok news of the days, of course very interesting,
Speaker 11: and one hundred and seventy million people are watching the
Speaker 11: outcome there. I don't have any prediction about what's going
Speaker 11: to happen on Monday at noon when President elect Trump
Speaker 11: takes over, but it does highlight how really difficult these
Speaker 11: issues are to address, and the larger question of how
Speaker 11: we address the China issue, I think is one that
Speaker 11: requires a real strategy. And what we're looking forward to,
Speaker 11: what the tech industry is looking forward to in the
Speaker 11: Trump administration is he does seem to have more of
Speaker 11: a focus on making this a strategic approach rather than
Speaker 11: just a one off approach. For example, we saw earlier
Speaker 11: this week the Biden administration adopted rules around AI diffusion.
Speaker 11: So these are rules that restrict the ability of US
Speaker 11: companies to export AI technology, including too allied countries around
Speaker 11: the world. That's a huge mistake. It wasn't done in
Speaker 11: consultation with industry. We think the Trump administration will do
Speaker 11: a better job with that kind of issue. But that's
Speaker 11: an example of the need to balance national security with
Speaker 11: economic interests and make sure that US leadership is not
Speaker 11: harmed by skewing too far in one direction or the other.
Speaker 11: That's what we're looking forward to seeing done differently in
Speaker 11: the trumpstration.
Speaker 4: And certainly Jensen Huang of in videos maybe feels similarly
Speaker 4: and in video pushed back significantly against that latest announcement announcement.
Speaker 2: But what is interesting is that perhaps jd Vance has.
Speaker 4: Supported well some views coming from Lena Khan, for example,
Speaker 4: about some of the strength and the overall domination some
Speaker 4: would say of certain players in tech. Just listen to
Speaker 4: what Lena Khan said a little bit about the bipartisan
Speaker 4: nature of that.
Speaker 12: There's no doubt that there is strong bipartisan concern about
Speaker 12: the economic power of large technology companies and how that
Speaker 12: can undermine fair competition, undermine people's free speech rights, and
Speaker 12: so well. Of course, have to see what the next
Speaker 12: administration does, but it's certainly been an area of strong
Speaker 12: bipartisan concern during my tenure.
Speaker 4: The FTC chair has some support, as I say, from
Speaker 4: Vice President elect. Will you see an enthusiasm around future
Speaker 4: M and A in technology.
Speaker 11: Do you think, well, Leida Khana has about seventy two
Speaker 11: hours left on the job, and the person that the
Speaker 11: President ELECTA is designated to replace her has taken a
Speaker 11: much more balanced approach and we think a more favorable
Speaker 11: approach to advancing US innovation. Look, the President himself is
Speaker 11: a technology innovator. He is surrounding himself by technology innovators
Speaker 11: who are coming into office, people who will be serving
Speaker 11: in crucial roles and understand the vital role that the
Speaker 11: US technology industry plays in economic growth. As far as
Speaker 11: trade and export around technology. For example, we run a
Speaker 11: three hundred billion dollars surplus in the US on digital trade,
Speaker 11: that's exports of US technology around the world. So I
Speaker 11: think as long as we can place regulators as the
Speaker 11: President elect is looking to do, who are willing to
Speaker 11: listen to industry and make sure that balance is struck
Speaker 11: between national security and economic growth, I think will be
Speaker 11: in a much better place for the next four years
Speaker 11: to ensure that the technology industry can work in partnership
Speaker 11: with government to advance economic growth.
Speaker 4: Jason Oxman, President of the Information Technology Industry Council, Thanks
Speaker 4: so much for your time today. We must return to
Speaker 4: the TikTok decision that came from the Supreme Court earlier today,
Speaker 4: standing by the law to ban or divest. The latest
Speaker 4: coming from President elect Trump on truth Social Trump saying
Speaker 4: that the TikTok decision will come in the not too
Speaker 4: distant future from him. He says he needs time to
Speaker 4: review the TikTok situation. Obviously he's been promising to solve it.
Speaker 4: Bloomberg Intelligence senior analyst man Neet Sing joins us now.
Speaker 4: And if I'm an oracle and an infrastructure provider, if
Speaker 4: I'm Apple and I'm Google, the app providers, what.
Speaker 2: Do I do in this situation on the nineteenth.
Speaker 13: I mean, given the liabilities of you know, keeping the
Speaker 13: app up, you are going to shut it down periods,
Speaker 13: so the app will go. Derek, The question is what
Speaker 13: will the President Trump do on day one? And my
Speaker 13: sense is, given all the tech executives are coming to
Speaker 13: his inauguration, you'll probably find a way to migrate that
Speaker 13: TikTok data to the competing platforms, whether it's YouTube or meta.
Speaker 13: Because right now everyone is scared like they will suddenly
Speaker 13: lose all their business because all the followers and the
Speaker 13: content will go away. Well, guess what if you can
Speaker 13: migrate that data to a meta or a YouTube, then
Speaker 13: you can potentially keep your business running. So that data
Speaker 13: aspect is huge. I think far too much focus has
Speaker 13: gone on the sale of the US business in this case.
Speaker 13: If you can migrate the data, even if you keep
Speaker 13: aside the algorithm, the data is huge because that's what
Speaker 13: I think everyone cares about when you talk to the
Speaker 13: creators and the people who consume the content, and I
Speaker 13: think the migration of data would be a huge factor
Speaker 13: when it comes to the future of TikTok.
Speaker 3: Mendeep. We've seen Donald Trump present himself as the deal
Speaker 3: maker and he really would like to see this problem
Speaker 3: solved by selling it and finding a buyer, but that
Speaker 3: is no easy feat. He talked about some of the hurdles,
Speaker 3: including the cost and then who would be able to
Speaker 3: pay for it, and then clear the national security hurdles.
Speaker 13: Yeah, look, there has been some private equity interest in
Speaker 13: the past, and obviously Musk has been mentioned as a
Speaker 13: potential buyer given you know, his closeness with President Trump
Speaker 13: and also uh you know, with the Chinese authorities. So
Speaker 13: clearly there are a number of potential buyers, even you know,
Speaker 13: the likes of Walmart and Oracle who have been mentioned
Speaker 13: in the past. So I can see a lot of
Speaker 13: companies being entrusted in acquiring an asset like TikTok, and
Speaker 13: you can see how sticky it is. I mean, all
Speaker 13: the millions of people who are using it clearly want
Speaker 13: the platform to stay. And that's where I think, given
Speaker 13: the stickiness of the platform, finding a potential buyer is
Speaker 13: the most likely option I think President Trump is going
Speaker 13: to go with. But at the same time, I think
Speaker 13: that data migration aspect is huge because that's going to
Speaker 13: solve probably half of the problem when it comes to
Speaker 13: the users of the platform.
Speaker 4: A lot of this, of course takes byte Dance or
Speaker 4: indeed China's sign off. Bloomberg Intelligence senior annist Manny Singh,
Speaker 4: and of course a reminder of some of the investors
Speaker 4: in byte Dance that might benefit.
Speaker 2: Welcome back to bloomag Technology. I'm karenin Hyde in New.
Speaker 4: York and I'm Mike Shepard and Washington quick check on
Speaker 4: these markets, and Mike, we look at the ramifications of
Speaker 4: the highly anticipated Supreme Court decision on TikTok. They decide
Speaker 4: that the law stands that it has to be banned
Speaker 4: or divested, and ultimately doesn't have much of an effect
Speaker 4: on some of the competitors that were meant to be
Speaker 4: most implicated by potentially a TikTok ban. Meta Platforms up
Speaker 4: six ten percent, Alphabet Currying up one point eight percent.
Speaker 4: We're looking at Snap though off by one point seven percent,
Speaker 4: which had been one of the most volatile stocks in
Speaker 4: relationship to TikTok's remaining. In the United States, everyone now
Speaker 4: waiting with baited breath as to what lawmakers do, what
Speaker 4: Trump does. He takes to truth social of course, to
Speaker 4: say a decision is imminent.
Speaker 2: Let's get more.
Speaker 4: From Remberg's Kurt Wagner, because the Supreme Court leaves it
Speaker 4: up to the lawmakers, and there's a lot of them.
Speaker 2: We've got a watch kut.
Speaker 14: There are, and there are so much that's going to
Speaker 14: happen over the next seventy two hours, Caroline, because while
Speaker 14: the Supreme Court did uphold the law, this was something
Speaker 14: that we all expected. Right now, the ball is essentially
Speaker 14: in Donald Trump's court, so the band should kick in Sunday,
Speaker 14: he said, I'm looking for ways to get around this.
Speaker 14: Everyone expects that there will be some type of executive
Speaker 14: order once he takes office to try and delay this,
Speaker 14: maybe give TikTok more time to find a buyer, But
Speaker 14: of course TikTok says they don't want a buyer. So
Speaker 14: there are so many sort of unique elements to this thing.
Speaker 14: I think it'd be a little premature to say anyone
Speaker 14: knows exactly what's going to happen over the weekend and
Speaker 14: into the inauguration day. But this was one thing that
Speaker 14: is at least now off the table, the idea that
Speaker 14: the Supreme Court could save TikTok, and we can now
Speaker 14: focus on the other options, which again mostly center around
Speaker 14: Donald Trump.
Speaker 3: In those options, don Donald Trump Kurt really do centers.
Speaker 3: We were just discussing on finding a buyer. We did
Speaker 3: see one Frank McCourt, the billionaire behind the Project Liberty proposal.
Speaker 3: Do they have the energy and wherewithal to pull that off?
Speaker 3: We know that his partner, Kevin O'Leary, was at mar
Speaker 3: A Lago to talk to Trump about TikTok.
Speaker 14: They do have the energy, certainly, they've been out talking
Speaker 14: about this for a long time. We spoke with Frank
Speaker 14: McCourt in our Bloomberg Opices just a few weeks ago,
Speaker 14: and he was very optimistic that they could get a
Speaker 14: deal done. I think the question is, does Bitte Dance
Speaker 14: want to play Baul right? I think everyone on sort
Speaker 14: of the US government side of the fence wants a
Speaker 14: deal to get done because that is what keeps TikTok around.
Speaker 14: Certainly President Donald Trump wants a deal to get done.
Speaker 14: It's really up to will Bite Dance in the Chinese government,
Speaker 14: you know, say yes, we are willing to sell to
Speaker 14: a Frank McCourt or someone else. And I think that's
Speaker 14: the much larger hurdle that needs to happen here. I
Speaker 14: don't think it's for lack of interest or energy on
Speaker 14: the Frank McCourt side. I think it really comes down
Speaker 14: to does Bite Dancy Frank McCord as a valid acquirer
Speaker 14: of this asset.
Speaker 3: Bloomberg's Kurt Wagner, thank you so much. Now let's bring
Speaker 3: in Sarah O. Lamb for more. She is a senior
Speaker 3: fellow at the Tech Policy Institute here in Washington. Sarah,
Speaker 3: what do we take in terms of the long term
Speaker 3: from this decision? What kind of a lasting impact on jurisprudence?
Speaker 3: With respect to tech and content. Can we take from it?
Speaker 15: Well, it was really interesting reading the opinion which came
Speaker 15: out this morning at ten am. It was a pure
Speaker 15: curium opinion, which means it's for the court, with two
Speaker 15: concurring opinions attached, one by Justice Sodo Mayor and one
Speaker 15: by Justice Gorsig. They decided the case on the merits
Speaker 15: on the First Amendment question, and they found that the
Speaker 15: band survives intermediate scrutiny, it's constitutional, and Congress has valid
Speaker 15: content neutral reasons for regulating TikTok. So they first go
Speaker 15: through is it a First Amendment question properly before us?
Speaker 15: And they say yes, And then they go through the
Speaker 15: First Amendment analysis, finding that the law was facially content neutral,
Speaker 15: it was justified by a content neutral rationale, that TikTok
Speaker 15: brought a claim, but that under intermediate scrutiny the law
Speaker 15: is valid. So this decision will be, you know, part
Speaker 15: of the canon or part of the First Amendment jurisprudence.
Speaker 15: And Justice Gorsa she even said he feels uncomfortable, you
Speaker 15: know that the Court is making such a big decision
Speaker 15: based on a handful of days of deliberation, but that
Speaker 15: it's narrow enough that they issued a pure procureum opinion
Speaker 15: and they all are in agreement.
Speaker 4: So they're in agreement that national security was the key
Speaker 4: here and that ultimately First Amendment right stays if you're
Speaker 4: able to find a different buyer. It's mainly the issue
Speaker 4: of who owns the parent company of who owns TikTok,
Speaker 4: and indeed how close bite does is to China?
Speaker 2: So what next?
Speaker 4: How can you alleviate that national security issue? Who would
Speaker 4: have to be a US buyer? Is there any way
Speaker 4: that we cannot see it divested?
Speaker 16: Right?
Speaker 15: Well, that's a really good observation. Nothing else has changed.
Speaker 15: So Congress has made a determination. The President five years
Speaker 15: ago even raised questions about China being a foreign adversary
Speaker 15: and having impact on the algorithms. So even the prediction
Speaker 15: markets are looking at well, will the ban be in
Speaker 15: play in May twenty twenty five, so you know, how
Speaker 15: much can really change? Will there be changes in their systems,
Speaker 15: in their ownership structure. That's all still to be determined,
Speaker 15: but the concerns are still there. Yeah, there is strikingly
Speaker 15: bipartisan support by Congress. No legislative legislator really disputed the
Speaker 15: national security risks, So those are all still there, but now.
Speaker 2: They're changing their mind. That seems to be a complete
Speaker 2: about face.
Speaker 4: Everyone wants to ensure that on the nineteenth puff we
Speaker 4: don't suddenly lose TikTok Sarah. We're also seeing the user
Speaker 4: based flock to other Chinese run companies. Lemonade is owned
Speaker 4: by bike Dance. We're seeing red Note becoming a key focus.
Speaker 2: Is that going to be a concern? Is that a
Speaker 2: national security issue?
Speaker 15: Isn't it ironic? I think it's interesting and it is
Speaker 15: a kind of a political popular culture moment where American
Speaker 15: policy makers have to kind of make the case to
Speaker 15: American young people that social media apps that are made
Speaker 15: here in the US are preferable. But really they're competing
Speaker 15: on stickiness. The apps are sticky. TikTok is fun to
Speaker 15: be on. So, if anything, there might be implications for
Speaker 15: American policy makers to be more sympathetic to American companies
Speaker 15: building social media apps.
Speaker 3: Sarah. How does this fit into the broader game between
Speaker 3: Washington and Beijing when it comes to trade and technology policy.
Speaker 3: Does this become if a sale goes through and China
Speaker 3: approves it, does this become a point of leverage for
Speaker 3: shijiin ping his dealings with Donald Trump. We saw they
Speaker 3: spoke today.
Speaker 15: Yeah, Well, TikTok and the sticky apps, they're definitely a
Speaker 15: feather in their cap. China's very good at making these apps,
Speaker 15: and so you know, it would be surprising if they
Speaker 15: let bite, dance, divest. I mean, if I were them,
Speaker 15: that's a very strong point of leverage. But President Trump
Speaker 15: is good at negotiating a deal, and so there are
Speaker 15: private buyers as well. What could happen is they could
Speaker 15: buy the TikTok brand so and rebuild the whole infrastructure.
Speaker 15: It would be a different app, a different stack, but
Speaker 15: it would still have presumably the same social graph that
Speaker 15: TikTok has, but not the sauce the source code that
Speaker 15: makes it so sticky. It raises a question of like
Speaker 15: where are the American competitors, Like Caroline mentioned snap earlier
Speaker 15: Snapchat threads like why are these apps not getting all
Speaker 15: the traffic that might come off of TikTok. So I
Speaker 15: think it's a good moment for Americans to think about, well,
Speaker 15: why don't we have a TikTok that's homegrown? Can we
Speaker 15: have one that's better built, and let's keep Americans happy
Speaker 15: on American apps. I think that is a presumption that
Speaker 15: maybe all the scrutiny of social media companies has maybe lost.
Speaker 15: I mean, there's a balance between you know, regulating and
Speaker 15: warning of dangers, but then there's also this competition that's
Speaker 15: going on. So I think it's an interesting moment.
Speaker 2: We're gonna have a new competitor.
Speaker 4: Clapper Texas Bace joins ing joining the network a little
Speaker 4: bit later. Sarah Lamb, Senior Fellow at the Tech Policy Institute.
Speaker 2: Great to have your take today, Thank you.
Speaker 4: Coming up shifting gears to SpaceX and Blue Origin, both
Speaker 4: facing some setbacks during their most recent launches. Next, this
Speaker 4: is bloomerg Technology.
Speaker 17: I know this maybe.
Speaker 9: What this.
Speaker 4: Footage taken of SpaceX's Starship rocket exploding in the sky
Speaker 4: just minutes into its seventh test flight. This didn't worry
Speaker 4: found that Enol Musk, writing on XT quote, this is
Speaker 4: barely a bump in the road.
Speaker 2: For more.
Speaker 4: Bloomberg's Lauren Grush joins us for more, and Lauren, they
Speaker 4: did make that extraordinary catch of.
Speaker 2: The super super heavy booster, so steps.
Speaker 4: Being made not totally up into the right though.
Speaker 6: Yeah.
Speaker 18: The weird part of this entire test launch is that
Speaker 18: they actually achieved their secondary objective, which was to make
Speaker 18: that catch, but then the actual main objective of the flight, which.
Speaker 6: Is to test out Starship in.
Speaker 18: Space, it cut quite short, which is unexpected given the
Speaker 18: SETI progress that they've been making on these flights over
Speaker 18: the last couple of years.
Speaker 3: Lauren, we didn't see too much gnashing of teeth from
Speaker 3: SpaceX or from Elon Musk. They really seem to, as
Speaker 3: he called it, as just.
Speaker 2: A bump in the road.
Speaker 3: Talk about their approach towards things like this. When things
Speaker 3: don't go their way, do they just go back to
Speaker 3: the drawing board and there is even no change in
Speaker 3: their launch schedule.
Speaker 16: Yeah.
Speaker 6: Absolutely.
Speaker 18: This is kind of all about, you know, SpaceX's culture
Speaker 18: and how they liked to test. They like to fly frequently.
Speaker 18: Sometimes they'll break things while they fly. They learn from
Speaker 18: those moments, and then they go back and they change
Speaker 18: and make updates and fla again rather quickly. They're a
Speaker 18: bit of an outlier when it comes to the space
Speaker 18: industry for doing this. You know, a lot of other
Speaker 18: companies and even NASA are a bit risk averse, but
Speaker 18: for them, they embrace this risk, and so for them
Speaker 18: it's really a learning experience. It definitely would say was
Speaker 18: unexpected just given the steadied progress that they've been making.
Speaker 18: You know, this is their shortest test flight, I think
Speaker 18: since the first couple that they.
Speaker 6: Did a few years back.
Speaker 18: So you know, we weren't really anticipating an explosion like this.
Speaker 2: Blue Origin making steps forward.
Speaker 6: Yes, it's speak.
Speaker 18: You know, it's been a wild week on the space
Speaker 18: beak for US space reporters.
Speaker 6: Please have mercy on us.
Speaker 18: So the morning of the starship launch, Blue Origins new
Speaker 18: when launched for the very first time on its debut flight,
Speaker 18: and unlike most rockets, it did achieve orbit on its
Speaker 18: very first launch attempt, which is a very amazing accomplishment
Speaker 18: for the company. They did try to land the rocket
Speaker 18: after the flight. Bacex has perfected with its Falcon nine. Unfortunately,
Speaker 18: it did miss the landing on the barge at see
Speaker 18: that it was targeting. But the fact that it made
Speaker 18: orbit on its first attempt is definitely something in that
Speaker 18: Blue Origins should celebrate.
Speaker 3: Bloomberg's Laurin grush, thank you. Turning to defense tech, the
Speaker 3: sector is also facing major investment as geopolitical and isolationist
Speaker 3: risks rise. Here's what Anderill founder Palmer Lucky told us
Speaker 3: yesterday about a potential conflict with China when he announced
Speaker 3: a new plant in Ohio.
Speaker 17: The types of threats, the threats of the United States
Speaker 17: is facing that our allies around the world are facing.
Speaker 17: The fact that we are predicted to run out of
Speaker 17: munitions within the first eight days of a potential conflict
Speaker 17: with China mean that we need to hyper scale our
Speaker 17: manufacturing of these telo Io.
Speaker 11: Was this the only state that could guarantee that timeline?
Speaker 17: I think that they were the state they gave us
Speaker 17: the best shot.
Speaker 2: Of hitting that timeline.
Speaker 3: For more on the defense tech sector and some of
Speaker 3: the top names to watch this year, Bloomberg's Lazette Chapman
Speaker 3: joins us. Now, Lizette, you've done some really great reporting
Speaker 3: here trying to find just a few of the key
Speaker 3: names to watch. Maybe rattle off a few and then
Speaker 3: tell us a little bit more about how big this
Speaker 3: universe of defense tech companies is.
Speaker 19: Absolutely well, it's just getting started. I mean, in the
Speaker 19: you know, talking with Lauren, you know, she mentioned probably
Speaker 19: the granddaddy of them all, SpaceX, you know, which has
Speaker 19: proven you know that they you know, companies can and
Speaker 19: will continue to secure you know, or can secure these contracts,
Speaker 19: big contracts, and I mean it's market cap is you know,
Speaker 19: twice that of Lockheed Martin. You know, Palenteer also has
Speaker 19: a market cap now that that is bigger than Lockheed.
Speaker 2: Martin and raytheon, you know.
Speaker 19: And so what we have now is a bunch of
Speaker 19: startups and we just you know, called it down to
Speaker 19: ten on the list that focus on things that will
Speaker 19: have an impact on war like things like Hermias, who
Speaker 19: you know, which specializes in hypersonics, the ability to travel
Speaker 19: five times the you know, the speed of sound.
Speaker 13: You know.
Speaker 19: We've got Epius, which specializes in you know, high powered
Speaker 19: microwaves that can shoot drones out of the skies. Is
Speaker 19: one hundred or more. You know. We've got other ones
Speaker 19: on the list as well that are spanning a lot
Speaker 19: of different areas that are you know, redefining warfare. What's
Speaker 19: interesting about this list, so if you look at it,
Speaker 19: all of these have been started within the past, say, six, seven,
Speaker 19: eight years, So these companies are at the size now
Speaker 19: that maybe a paleteer in a SpaceX were a decade ago.
Speaker 19: So these are kind of the up and commerce and
Speaker 19: certainly there's some other ones as well, but the timing
Speaker 19: and route to maturity is.
Speaker 2: Something to watch.
Speaker 4: Andrewill now worth fourteen billion SCALEAI that isn't on this
Speaker 4: particular graphic at the moment. All about AI the data
Speaker 4: behind warfare here it's worth thirteen point eight billion.
Speaker 2: What's interesting is the.
Speaker 4: Diversification where these companies are being built the zet Can
Speaker 4: you tell about where there is a home for defense
Speaker 4: tech or is it really sprawling?
Speaker 19: You nailed it right there, Caroline, is that it is
Speaker 19: very much sprawling.
Speaker 8: You know.
Speaker 19: We in with ed conversation with Palmer yesterday asked, you know,
Speaker 19: why not build Anderill, you know, in California, And you know,
Speaker 19: was that ever on the list? And Palmer said there
Speaker 19: was a zero percent chance, and he, you know, rattled
Speaker 19: off a bunch of reasons why they're not the only
Speaker 19: ones that are are are looking at the high cost
Speaker 19: of living, the high cost of energy, some regulatory issues,
Speaker 19: et cetera.
Speaker 2: That are driving other.
Speaker 19: Companies to operate and in other areas including like hermias
Speaker 19: is in Atlanta, for example. You know you've got Rebuild,
Speaker 19: you know, in Massachusetts. So they are diverse. There are
Speaker 19: new hubs developing. Firefly courses in Colorado. I see that
Speaker 19: they're on the screen, so it is diverse, and they
Speaker 19: are looking to create a number of new tech hubs
Speaker 19: that are focused on defense.
Speaker 4: An amazing tend to go get our cloths into and
Speaker 4: there's cun team more out there. As you say that,
Speaker 4: you continue to report on a zed Chapman on the
Speaker 4: defense tech you need.
Speaker 2: To know about.
Speaker 4: Turning back to TikTok, one of the groups most impacted
Speaker 4: by the bat and all potential bat is creators. For
Speaker 4: more on this, we're joined by Courtney Spritzer, co founder
Speaker 4: and CEO of Social Flights and marketing agency focused on
Speaker 4: social media in particular. You're building and developing strategic partnerships
Speaker 4: with certain influences. What's their reaction to a potential going
Speaker 4: dark on Sunday.
Speaker 16: Yes, there is a lot of anxiety around this. There
Speaker 16: are tons of creators who really rely on tik talk
Speaker 16: for partnerships with brands, for affiliate marketing, for selling their own.
Speaker 6: Merchandise on TikTok shop.
Speaker 16: So I think a lot of creators are on the
Speaker 16: edge of their seat waiting to see what's going to
Speaker 16: happen on Sunday, and they're also making a lot of
Speaker 16: preparations for what they're going to do if there is
Speaker 16: a band.
Speaker 4: Yeah, they've been diversifying, pointing newses onto new forms of
Speaker 4: social media or indeed older ones such as reels for example,
Speaker 4: and Instagram. I'm interested though the advertisers, the marketers you
Speaker 4: talk to, what do they do. They've spent money, they've
Speaker 4: committed to be putting their brand on this particular platform.
Speaker 4: If they can't access them, do they get money back?
Speaker 4: What's their risk analysis?
Speaker 2: Right now?
Speaker 16: Yes, all marketers and advertisers are definitely planning for what
Speaker 16: will happen after Sunday. So essentially what will happen is
Speaker 16: they may shift those advertising dollars to other platforms. I
Speaker 16: think a lot of people are taking a wait and
Speaker 16: see approach. The news keeps changing day over day, so
Speaker 16: we're really going to have to see what happens on Sunday.
Speaker 16: But everything that we're talking to all of our clients,
Speaker 16: we're all making preparations.
Speaker 4: We're listen, hearing and seeing here how potentially Instagram based
Speaker 4: spending boosted the most, Facebook does well YouTube. I'm interested
Speaker 4: about some of these Chinese competitors. We're all now hearing
Speaker 4: of Red Note is its colloquially known here in the
Speaker 4: United States Lemonade, of course is also in by byteedance,
Speaker 4: so an issue, but any advertisers any is looking at spending.
Speaker 6: There, Yeah, it's possible.
Speaker 16: I think as marketers, we're always looking to see all
Speaker 16: of the channels that are available and where our audiences
Speaker 16: are spending their time.
Speaker 6: So we're definitely considering it.
Speaker 16: But those platforms too will likely face the same challenges
Speaker 16: that we're.
Speaker 6: Fitting out with TikTok.
Speaker 16: So I think everyone is being very cautious making their
Speaker 16: backup plans, and we're having constant conversations with our clients
Speaker 16: so that we're keeping them up to date, minute by
Speaker 16: minute on what's going on.
Speaker 4: Brands have seen TikTok in such a different light, the
Speaker 4: way in which that you can become a trend overnight
Speaker 4: without even really planning to or indeed starting to plan to,
Speaker 4: and being strategic through companies such as your own, how
Speaker 4: are they going to navigate the changing nature of trending
Speaker 4: and ensuring their brands get to the right people at
Speaker 4: the right time.
Speaker 16: Yeah, So that is the nature of the business that
Speaker 16: we're in. These social media platforms are constantly evolving, and
Speaker 16: we always advise creators and influencers to not put all
Speaker 16: of their eggs in one basket and to rely on
Speaker 16: certain social media platforms for their incomes. So what a
Speaker 16: lot of creators are doing outside of signing petitions to
Speaker 16: make sure that TikTok stays intact is diversifying and going
Speaker 16: to other social media networks. They're also building up their
Speaker 16: own owned platforms, so that would be making their own websites,
Speaker 16: building their email list so that they can reach their
Speaker 16: followers outside of specific platforms, which is really really important
Speaker 16: to always have a diversified approach, especially when it comes
Speaker 16: to relying on platforms that you just don't own.
Speaker 2: And is not the lesson here.
Speaker 4: Look, we're always shifting, we're always moving, we're always finding
Speaker 4: the nest, greatest thing.
Speaker 16: Yes, that is what is the major lesson here is
Speaker 16: that the reality is if you are building your business
Speaker 16: or you're following on a specific platform that you do
Speaker 16: not personally own, you're always going to have this risk.
Speaker 6: We see this happen a lot.
Speaker 16: Sometimes these platforms face outages and you don't have access
Speaker 16: to post at certain specific times.
Speaker 6: So it's always really important.
Speaker 16: To own your audience and you can do that by
Speaker 16: collecting emails, diversifying your channel base, and figuring out ways
Speaker 16: to reach your customers and your audiences on other platforms.
Speaker 4: Social Fly co founder and CEO Cony Sprits a busy
Speaker 4: day for you. Thanks for joining us out of Miami.
Speaker 4: Now that does it for this edition of bloom mag Technology.
Speaker 4: You do not want to forget our podcast kind Of
Speaker 4: on the terminal as well as online on Apple, Spotify,
Speaker 4: and iHeart. Stay tuned throughout the day for the latest
Speaker 4: on TikTok. This is BLOEMG Technology