1 00:00:00,280 --> 00:00:03,720 Speaker 1: This is a story of TikTok showdown with President Trump. 2 00:00:04,160 --> 00:00:08,080 Speaker 1: It starts on a Friday in August. For Mario Parker, 3 00:00:08,480 --> 00:00:10,600 Speaker 1: it began just like any other night on the job. 4 00:00:11,480 --> 00:00:14,400 Speaker 1: He's a reporter here at Bloomberg who covers the White House. 5 00:00:14,960 --> 00:00:19,200 Speaker 1: The President always travels with a group of reporters. We 6 00:00:19,320 --> 00:00:23,160 Speaker 1: give updates on the president's movements. That could be whether 7 00:00:23,200 --> 00:00:25,000 Speaker 1: at the White House or that can be on the 8 00:00:25,079 --> 00:00:30,040 Speaker 1: road that sometimes involves riding aboard Air Force one. That night, 9 00:00:30,520 --> 00:00:33,879 Speaker 1: Mario was on the plane with President Trump. The journalist 10 00:00:34,000 --> 00:00:36,360 Speaker 1: usually sit in the back of the plane waiting for 11 00:00:36,400 --> 00:00:39,480 Speaker 1: the President to make a move. When he starts walking back, 12 00:00:39,840 --> 00:00:42,720 Speaker 1: you know it. So you see, you know, some of 13 00:00:42,720 --> 00:00:46,120 Speaker 1: the Secret Service agents move into different positions, and so 14 00:00:46,159 --> 00:00:48,600 Speaker 1: we know, oh he's coming, he's on his way back. 15 00:00:49,120 --> 00:00:52,120 Speaker 1: It's an electricity at that point because you know he's 16 00:00:52,159 --> 00:00:55,360 Speaker 1: coming back. It's going to be an intimate conversation. Trump 17 00:00:55,360 --> 00:00:58,120 Speaker 1: had already said he might go after TikTok earlier that 18 00:00:58,200 --> 00:01:01,880 Speaker 1: summer because it was owned by a Chinese company, but 19 00:01:01,960 --> 00:01:04,960 Speaker 1: he had just made a vague threat, and Mario wanted 20 00:01:05,000 --> 00:01:09,759 Speaker 1: to see if the President would say something more specific. TikTok. 21 00:01:09,880 --> 00:01:13,559 Speaker 1: That was like my primary if if I had a 22 00:01:13,640 --> 00:01:16,360 Speaker 1: question with the president, that was like my target for 23 00:01:16,400 --> 00:01:19,760 Speaker 1: that day. I asked him about it. He was kind 24 00:01:19,800 --> 00:01:22,160 Speaker 1: of baffling on whether or not to announce it. No 25 00:01:22,200 --> 00:01:25,640 Speaker 1: one really expected a straight answer from Trump, but the 26 00:01:25,680 --> 00:01:28,760 Speaker 1: reporters that had day kept pressing him, and then the 27 00:01:28,800 --> 00:01:31,679 Speaker 1: President came out and said he was going to band TikTok. 28 00:01:32,120 --> 00:01:35,200 Speaker 1: He might sign something as soon as the next day. 29 00:01:35,400 --> 00:01:38,200 Speaker 1: Trump said, I have that authority. I could do it 30 00:01:38,280 --> 00:01:43,000 Speaker 1: with an executive order. This is something that's like concrete tomorrow, 31 00:01:44,040 --> 00:01:47,480 Speaker 1: hard day. I'm going to take this hard action, which 32 00:01:47,520 --> 00:01:50,640 Speaker 1: is banning, and I'm going to do it in this manner, 33 00:01:51,040 --> 00:01:55,400 Speaker 1: and so there's a much more definitive, serious tone to it. 34 00:01:55,920 --> 00:01:59,640 Speaker 1: This was huge news because it wasn't just a conflict 35 00:01:59,680 --> 00:02:03,400 Speaker 1: between the President and TikTok. Things between the US and 36 00:02:03,480 --> 00:02:06,440 Speaker 1: China had never been worse. For Trump to pick a 37 00:02:06,480 --> 00:02:09,320 Speaker 1: fight with TikTok meant that he was going after China 38 00:02:09,520 --> 00:02:13,480 Speaker 1: in a big way. It's about maybe a dozen journalists. 39 00:02:13,919 --> 00:02:16,520 Speaker 1: I looked around just to make sure a to make 40 00:02:16,560 --> 00:02:19,120 Speaker 1: sure I heard him right, because I'm wondering if everybody 41 00:02:19,120 --> 00:02:23,280 Speaker 1: else is freaking out just like me because I'm already thinking, um, 42 00:02:23,600 --> 00:02:25,880 Speaker 1: x amount of miles in the air. I don't have 43 00:02:26,000 --> 00:02:29,520 Speaker 1: cell phone service. I need to tell my editors, like 44 00:02:29,600 --> 00:02:32,240 Speaker 1: what's going on. I'm panicking a little bit inside, and 45 00:02:32,280 --> 00:02:34,799 Speaker 1: I look around it. Everybody else has the same look 46 00:02:34,800 --> 00:02:37,799 Speaker 1: of horror. You know, how long will it take until 47 00:02:38,040 --> 00:02:40,680 Speaker 1: you know? I'm looking at my phone like when can 48 00:02:40,720 --> 00:02:42,480 Speaker 1: I get a bar? When can I get a bar? 49 00:02:43,160 --> 00:02:46,399 Speaker 1: When the plane landed, the news rippled like an explosion 50 00:02:46,440 --> 00:02:50,280 Speaker 1: across TikTok's teenage users. So it was actually I was 51 00:02:50,320 --> 00:02:52,959 Speaker 1: in my room because I believe it was like one 52 00:02:53,080 --> 00:02:55,960 Speaker 1: or two in the morning here for me, and I 53 00:02:56,000 --> 00:02:58,240 Speaker 1: was about to go to bed, and then I get 54 00:02:58,280 --> 00:03:01,680 Speaker 1: a call from my friends and he's like, oh my gosh, 55 00:03:01,960 --> 00:03:05,680 Speaker 1: did you hear what happened? And then apparently, you know, 56 00:03:05,880 --> 00:03:08,840 Speaker 1: Trump said that TikTok he was going to ban TikTok tomorrow, 57 00:03:09,040 --> 00:03:12,679 Speaker 1: like and it was Friday night. That's Gabby Murray. She's nineteen. 58 00:03:13,080 --> 00:03:16,360 Speaker 1: She's a popular TikTok star who's spoken on previous episodes. 59 00:03:16,760 --> 00:03:18,720 Speaker 1: It was kind of almost like a little panic thing, 60 00:03:18,880 --> 00:03:21,679 Speaker 1: and you know, all night I was like freaking out 61 00:03:21,919 --> 00:03:25,400 Speaker 1: and like I really couldn't calm down. I was super upset, 62 00:03:25,560 --> 00:03:28,320 Speaker 1: and I was like, is this really the end? Teens 63 00:03:28,360 --> 00:03:31,720 Speaker 1: on TikTok were spiraling and the late night TV shows 64 00:03:31,800 --> 00:03:34,480 Speaker 1: were eating this up. That's right. Instead of stopping a 65 00:03:34,560 --> 00:03:37,640 Speaker 1: pandemic or helping unemployed Americans, he's pretending he has the 66 00:03:37,720 --> 00:03:41,560 Speaker 1: power to unilaterally ban a social media app. Apparently this 67 00:03:41,640 --> 00:03:44,720 Speaker 1: is a very real national security threat, the Chinese government 68 00:03:44,760 --> 00:03:47,680 Speaker 1: knowing which Americans canon can't dance? What is he doing? 69 00:03:47,760 --> 00:03:49,560 Speaker 1: Is he the President of the United States or the 70 00:03:49,760 --> 00:03:53,720 Speaker 1: preacher from Footloose? And things were about to get even weirder. 71 00:03:54,520 --> 00:03:58,720 Speaker 1: You're listening to Foundering. I'm your host, Shelley Bancho. This 72 00:03:58,800 --> 00:04:02,120 Speaker 1: is the last episode of our series about TikTok. It's 73 00:04:02,120 --> 00:04:05,640 Speaker 1: the story of an improbable rise. The app captured the 74 00:04:05,680 --> 00:04:09,480 Speaker 1: attention of an entire generation. It became the first social 75 00:04:09,520 --> 00:04:12,960 Speaker 1: media app from China to build a global following. But 76 00:04:13,040 --> 00:04:16,479 Speaker 1: TikTok became a victim of its own success. It grew 77 00:04:16,520 --> 00:04:18,280 Speaker 1: to be so big that it got caught in a 78 00:04:18,440 --> 00:04:22,400 Speaker 1: standoff between the US and China. And this was only 79 00:04:22,440 --> 00:04:26,400 Speaker 1: the start of its problems. President Trump became so obsessed 80 00:04:26,400 --> 00:04:28,960 Speaker 1: with TikTok. He threatened to kick it out of the 81 00:04:29,080 --> 00:04:32,960 Speaker 1: US altogether. We asked TikTok to comment on this episode, 82 00:04:33,400 --> 00:04:36,560 Speaker 1: and a spokesperson referred me to a previous statement from 83 00:04:36,680 --> 00:04:41,120 Speaker 1: Vanessa Papas, the CEO of TikTok. She said, when it 84 00:04:41,160 --> 00:04:44,679 Speaker 1: comes to safety and security, we're building the safest app. 85 00:04:45,400 --> 00:04:48,760 Speaker 1: We're here for the long run. More on that after 86 00:04:48,800 --> 00:05:03,680 Speaker 1: a quick break by Dances. CEO John gi Ming is 87 00:05:03,720 --> 00:05:07,520 Speaker 1: known as a quiet guy, a workaholic who avoids the limelight. 88 00:05:08,040 --> 00:05:11,440 Speaker 1: But when President Trump went after TikTok, it felt like 89 00:05:11,480 --> 00:05:15,000 Speaker 1: a personal affront because you means spent his whole life 90 00:05:15,000 --> 00:05:19,159 Speaker 1: striving to become a successful entrepreneur, and just when he 91 00:05:19,240 --> 00:05:24,120 Speaker 1: succeeded in taking TikTok global and fulfilling his lifelong dream, 92 00:05:24,240 --> 00:05:27,799 Speaker 1: the American President wanted to take it away from him. 93 00:05:27,839 --> 00:05:30,640 Speaker 1: It's bizarre thinking back on it now, but for a 94 00:05:30,640 --> 00:05:35,679 Speaker 1: really significant portion of Trump's attention was focused not only 95 00:05:35,800 --> 00:05:40,520 Speaker 1: on coronavirus, the Democrats, or impeachment. He was zeroed in 96 00:05:40,560 --> 00:05:45,159 Speaker 1: on TikTok. So, after Trump says he's going to ban TikTok, 97 00:05:45,720 --> 00:05:49,640 Speaker 1: you mean, does something unexpected. He fires off a series 98 00:05:49,680 --> 00:05:52,960 Speaker 1: of letters to employees and says the company is facing 99 00:05:53,000 --> 00:05:56,960 Speaker 1: an existential crisis. I asked my colleague to read parts 100 00:05:56,960 --> 00:06:00,240 Speaker 1: of these letters. They're translated and edited for Claire Party. 101 00:06:01,040 --> 00:06:03,600 Speaker 1: These past few months have been a challenging time for 102 00:06:03,720 --> 00:06:06,880 Speaker 1: us all and over the last week you've probably heard 103 00:06:06,960 --> 00:06:10,400 Speaker 1: a lot of speculation about TikTok in the media. As 104 00:06:10,400 --> 00:06:13,640 Speaker 1: you may know, in the current environment, we faced a 105 00:06:13,720 --> 00:06:17,880 Speaker 1: real possibility of a forced sale of TikTok's US business 106 00:06:18,000 --> 00:06:20,800 Speaker 1: or an executive order banning the app in the US. 107 00:06:21,480 --> 00:06:24,320 Speaker 1: Sources told me that you mean new politicians were using 108 00:06:24,320 --> 00:06:27,440 Speaker 1: TikTok as a punching bag, but he refused to believe 109 00:06:27,480 --> 00:06:30,359 Speaker 1: that the US president whatever really shut down the app. 110 00:06:30,960 --> 00:06:35,279 Speaker 1: That just seemed unthinkable. In one lettering sounds almost mournful 111 00:06:35,440 --> 00:06:39,240 Speaker 1: about all the work that had been poured into TikTok. Yesterday, 112 00:06:39,360 --> 00:06:42,760 Speaker 1: I worked until dawn. Before I went to bed, I 113 00:06:42,839 --> 00:06:45,600 Speaker 1: opened my phone and saw someone post a photo from 114 00:06:45,600 --> 00:06:49,280 Speaker 1: our office building in Shinjin. At five thirty in the morning, 115 00:06:49,960 --> 00:06:53,279 Speaker 1: the lights were still one. Let's be honest, many of 116 00:06:53,279 --> 00:06:57,400 Speaker 1: our Chinese colleagues have made personal sacrifices, and I'll push 117 00:06:57,480 --> 00:07:00,920 Speaker 1: to become a global company. You mean living in China, 118 00:07:01,279 --> 00:07:03,440 Speaker 1: but he was keeping us ours to deal with the 119 00:07:03,520 --> 00:07:08,400 Speaker 1: Trump fallout. That's a twelve hour time difference. I mean 120 00:07:08,560 --> 00:07:13,160 Speaker 1: was frustrated he felt unfairly singled out. I actually understand 121 00:07:13,200 --> 00:07:16,960 Speaker 1: that as a Chinese company that's reached global status, people 122 00:07:17,000 --> 00:07:19,960 Speaker 1: will hold us to a highest standard, but we don't 123 00:07:19,960 --> 00:07:23,680 Speaker 1: have accurate information about us. He says. The US government 124 00:07:23,760 --> 00:07:26,720 Speaker 1: was overreaching and its attempts to force TikTok to sell 125 00:07:27,160 --> 00:07:30,040 Speaker 1: as a company, we have no choice but to abide 126 00:07:30,040 --> 00:07:32,720 Speaker 1: by the law. But that's not what be out a 127 00:07:32,800 --> 00:07:36,480 Speaker 1: side once. Their real goal is a full blown embargo 128 00:07:37,000 --> 00:07:40,880 Speaker 1: and more. Eming acknowledges that things might seem like a disaster, 129 00:07:41,360 --> 00:07:44,600 Speaker 1: but he urges employees to hold steady. We need to 130 00:07:44,640 --> 00:07:48,360 Speaker 1: show the vise misunderstandings. For the time being, we hope 131 00:07:48,400 --> 00:07:51,200 Speaker 1: that people will not be too concerned about the shotdown 132 00:07:51,320 --> 00:07:55,240 Speaker 1: damage to our reputation. Let's be patient and do the 133 00:07:55,320 --> 00:07:59,680 Speaker 1: right thing. The TikTok band caught the company by surprise. 134 00:08:00,360 --> 00:08:03,280 Speaker 1: Their new CEO, Kevin Mayer, had only been on the 135 00:08:03,360 --> 00:08:07,520 Speaker 1: job for two months. They hired Kevin from Disney. They 136 00:08:07,560 --> 00:08:10,760 Speaker 1: hoped an American executive leading the company might get the 137 00:08:10,840 --> 00:08:14,000 Speaker 1: U s government off their backs, but Trump went after 138 00:08:14,040 --> 00:08:18,400 Speaker 1: them anyway. That led to another question, could an American 139 00:08:18,520 --> 00:08:22,280 Speaker 1: president even ban a social media app? There was no 140 00:08:22,400 --> 00:08:25,960 Speaker 1: precedent for this. I spoke with my colleague Kurt Wagner, 141 00:08:26,320 --> 00:08:29,880 Speaker 1: He's a social media reporter. I remember my reaction was 142 00:08:29,960 --> 00:08:34,480 Speaker 1: basically to laugh, Is this something he can he can 143 00:08:34,559 --> 00:08:37,520 Speaker 1: legally do? Right? Can he just tell people they can't 144 00:08:38,280 --> 00:08:41,320 Speaker 1: have this app on their phones? And if so, how 145 00:08:41,400 --> 00:08:44,320 Speaker 1: would you even go about enforcing that right? But you know, 146 00:08:44,400 --> 00:08:47,079 Speaker 1: as with a lot of things with the Trump administration, 147 00:08:47,320 --> 00:08:52,199 Speaker 1: I think very quickly, you you learned that just because 148 00:08:52,240 --> 00:08:54,719 Speaker 1: something doesn't really make sense on the surface doesn't mean 149 00:08:54,720 --> 00:08:59,280 Speaker 1: that it's not being seriously pursued behind the scenes. The 150 00:08:59,320 --> 00:09:03,000 Speaker 1: TikTok and seemed to be about more than the app itself. 151 00:09:03,600 --> 00:09:08,800 Speaker 1: I think it became immediately clear that TikTok was being 152 00:09:08,920 --> 00:09:12,560 Speaker 1: used in this broader trade war with China. You realize 153 00:09:12,600 --> 00:09:16,880 Speaker 1: that it's not really about the app itself. It's about 154 00:09:16,920 --> 00:09:21,040 Speaker 1: the leverage that I think Trump and his administration thought 155 00:09:21,080 --> 00:09:25,280 Speaker 1: that they would have over over China. And so what 156 00:09:25,360 --> 00:09:29,080 Speaker 1: was expected to happen was for President Trump to come 157 00:09:29,080 --> 00:09:33,280 Speaker 1: out and say byte Dance needs to basically sell off 158 00:09:34,000 --> 00:09:38,720 Speaker 1: the US version of TikTok, and so as a result, 159 00:09:39,640 --> 00:09:42,880 Speaker 1: byte Dance was then in the market for a buyer 160 00:09:43,000 --> 00:09:46,200 Speaker 1: of its US business, and there was one name that 161 00:09:46,240 --> 00:09:50,679 Speaker 1: floated to the top as a potential buyer. Microsoft e 162 00:09:50,800 --> 00:09:53,679 Speaker 1: Ming had already held a number of secret meetings with 163 00:09:53,720 --> 00:09:57,080 Speaker 1: Microsoft CEO sat An Indella to talk about how they 164 00:09:57,080 --> 00:10:00,280 Speaker 1: could work together. But once the Trump and Minister station 165 00:10:00,400 --> 00:10:05,319 Speaker 1: turned up the heat on TikTok, those talks escalated. Microsoft 166 00:10:05,400 --> 00:10:07,400 Speaker 1: put out a statement saying they were in talks to 167 00:10:07,480 --> 00:10:11,280 Speaker 1: buy TikTok, and sources tell me that Donald Trump personally 168 00:10:11,320 --> 00:10:15,200 Speaker 1: called Microsoft CEO to ask for specific items to be 169 00:10:15,240 --> 00:10:18,480 Speaker 1: included in the press release before it went out. Yeah, 170 00:10:18,559 --> 00:10:22,520 Speaker 1: companies do not announce deals before deals are done. Typically, 171 00:10:22,679 --> 00:10:26,319 Speaker 1: the letter from Microsoft was very uncommon. Typically, when a 172 00:10:26,360 --> 00:10:31,480 Speaker 1: company like Microsoft by by TikTok, Microsoft and TikTok are talking, 173 00:10:31,960 --> 00:10:34,280 Speaker 1: you don't have the President of the United States and 174 00:10:34,360 --> 00:10:38,360 Speaker 1: his administration part of the negotiation. But this was not 175 00:10:38,440 --> 00:10:42,480 Speaker 1: a normal acquisition, and you did have the President as 176 00:10:42,520 --> 00:10:46,000 Speaker 1: part of the negotiation. Will you read that press release 177 00:10:46,040 --> 00:10:49,400 Speaker 1: that Microsoft put out. Yeah? Um, so this was from 178 00:10:49,440 --> 00:10:54,240 Speaker 1: their corporate blog and it says following a conversation between 179 00:10:54,360 --> 00:10:59,199 Speaker 1: Microsoft CEO Satia Adela and President Donald J. Trump, Microsoft 180 00:10:59,240 --> 00:11:02,360 Speaker 1: is prepared to continue discussions to explore a purchase of 181 00:11:02,400 --> 00:11:07,280 Speaker 1: TikTok in the United States. Microsoft fully appreciates the importance 182 00:11:07,320 --> 00:11:11,720 Speaker 1: of addressing the President's concerns. It is committed to acquiring TikTok, 183 00:11:11,880 --> 00:11:16,400 Speaker 1: subject to a complete security review and providing proper economic 184 00:11:16,440 --> 00:11:20,960 Speaker 1: benefits to the United States. Microsoft appreciates the US governments 185 00:11:21,000 --> 00:11:26,480 Speaker 1: and President Trump's personal involvement. What the heck is proper 186 00:11:26,600 --> 00:11:33,800 Speaker 1: economic benefits to the United States. This was a very 187 00:11:33,840 --> 00:11:37,240 Speaker 1: fun and bizarre wrinkle to this whole story. It was 188 00:11:37,320 --> 00:11:42,600 Speaker 1: kind of learned later that President Trump was actually expecting 189 00:11:42,760 --> 00:11:49,400 Speaker 1: some kind of payment in return for facilitating this arrangement. Right, 190 00:11:49,559 --> 00:11:54,559 Speaker 1: So it struck a lot of people as being um, 191 00:11:54,600 --> 00:11:59,360 Speaker 1: not only legally dubious, but certainly ethically dubious. Right, Like, 192 00:11:59,440 --> 00:12:04,040 Speaker 1: here's the president. He's demanding that this deal get done, 193 00:12:04,559 --> 00:12:07,719 Speaker 1: and then on top of that, he's demanding that some 194 00:12:07,800 --> 00:12:11,120 Speaker 1: type of payment go back to this says the U. S. Treasury. 195 00:12:11,160 --> 00:12:13,600 Speaker 1: There was speculation that it would even be you know, 196 00:12:13,679 --> 00:12:22,920 Speaker 1: to Trump himself. When we asked Microsoft about Trump's role 197 00:12:22,960 --> 00:12:27,080 Speaker 1: in the negotiations. They declined to comment. This was a 198 00:12:27,160 --> 00:12:30,960 Speaker 1: sobering moment for Yeming. It looked like TikTok could be 199 00:12:31,000 --> 00:12:36,080 Speaker 1: snatched away for reasons outside its control. TikTok's fate seemed 200 00:12:36,080 --> 00:12:38,599 Speaker 1: to rest on the whims of President Trump. There was 201 00:12:38,640 --> 00:12:41,400 Speaker 1: a lot of discussion at this time as well about 202 00:12:42,559 --> 00:12:46,400 Speaker 1: this idea of maybe just using TikTok as a distraction, right, 203 00:12:46,600 --> 00:12:51,280 Speaker 1: Like this was when the COVID fight was not going well. 204 00:12:51,520 --> 00:12:54,240 Speaker 1: You know, the election is coming up, right, and the 205 00:12:54,280 --> 00:12:57,880 Speaker 1: President was running out of money for his election efforts. 206 00:12:57,960 --> 00:13:00,600 Speaker 1: So like this was something that he felt he could 207 00:13:00,600 --> 00:13:05,080 Speaker 1: exert some level of control over that maybe you know, 208 00:13:05,200 --> 00:13:08,200 Speaker 1: other parts of his life and life in America at 209 00:13:08,240 --> 00:13:11,200 Speaker 1: that time, he didn't really have that. We'll be right back. 210 00:13:17,559 --> 00:13:20,920 Speaker 1: So this is when the clock starts ticking because Trump 211 00:13:20,920 --> 00:13:23,400 Speaker 1: makes good on his threats. He issues a pair of 212 00:13:23,440 --> 00:13:26,839 Speaker 1: executive orders giving TikTok a forty five day deadline to 213 00:13:26,880 --> 00:13:30,200 Speaker 1: find a buyer. Sources told me that Eming was reluctant 214 00:13:30,280 --> 00:13:33,280 Speaker 1: to sell his business, but he was under pressure because 215 00:13:33,280 --> 00:13:36,920 Speaker 1: the band was looming and his investors, who had sunk 216 00:13:36,960 --> 00:13:39,960 Speaker 1: seven point five billion dollars into by Dance over the 217 00:13:40,040 --> 00:13:43,840 Speaker 1: years wanted their payout before it was too late. Over 218 00:13:43,920 --> 00:13:47,680 Speaker 1: in China, Eming wasn't hot water too. Because his attempts 219 00:13:47,679 --> 00:13:51,600 Speaker 1: to appease the US government were really unpopular. People flooded 220 00:13:51,600 --> 00:13:55,160 Speaker 1: Eming social media with messages slamming his choice to sell. 221 00:13:55,720 --> 00:13:58,120 Speaker 1: They called him a U S lab doog, a trader. 222 00:13:58,720 --> 00:14:02,680 Speaker 1: They accused him of kneeling Washington and betraying China. Here's 223 00:14:02,720 --> 00:14:06,240 Speaker 1: former tech banker Roy Mom. They felt that Johniming was 224 00:14:06,320 --> 00:14:09,199 Speaker 1: really just giving in without a fight. Um, how can 225 00:14:09,280 --> 00:14:13,720 Speaker 1: you just given to the American government, you know, with 226 00:14:13,720 --> 00:14:15,719 Speaker 1: with their demands just like that, right. It's because it 227 00:14:15,760 --> 00:14:18,400 Speaker 1: seemed like it was overnight. It was like the executive 228 00:14:18,480 --> 00:14:21,840 Speaker 1: order came out and then John was like, okay, you know, 229 00:14:22,320 --> 00:14:25,320 Speaker 1: that's what it felt like. So TikTok found itself in 230 00:14:25,360 --> 00:14:28,920 Speaker 1: this situation where they were criticized in China for being 231 00:14:29,000 --> 00:14:33,000 Speaker 1: too American and they were criticized in America for being 232 00:14:33,000 --> 00:14:37,720 Speaker 1: too Chinese. Then the Chinese government decided to step in 233 00:14:38,160 --> 00:14:42,080 Speaker 1: new rules in China over the technology it exports. May 234 00:14:42,120 --> 00:14:46,640 Speaker 1: mean selling TikTok in the US could need approval from Beijing. 235 00:14:47,120 --> 00:14:50,120 Speaker 1: In the meantime, deal talks for TikTok's US operations have 236 00:14:50,320 --> 00:14:53,840 Speaker 1: hit a bit of a snag, or maybe an entire roadblock. 237 00:14:54,360 --> 00:14:58,080 Speaker 1: Until this moment, the Chinese government had mostly stayed out 238 00:14:58,120 --> 00:15:02,000 Speaker 1: of Trump's fight with TikTok, but they intervened once it 239 00:15:02,040 --> 00:15:06,120 Speaker 1: looked like advanced AI technology created by TikTok's Chinese parent 240 00:15:06,200 --> 00:15:09,440 Speaker 1: company might end up in the US. They came out 241 00:15:09,480 --> 00:15:12,280 Speaker 1: with a new law that prohibited any sort of sale 242 00:15:12,280 --> 00:15:17,160 Speaker 1: of TikTok without China's approval. Sources told me this shock teaming. 243 00:15:17,720 --> 00:15:20,800 Speaker 1: He didn't see it coming. TikTok was stuck between the 244 00:15:20,840 --> 00:15:23,760 Speaker 1: push and pull of the two countries. They needed to 245 00:15:23,760 --> 00:15:27,960 Speaker 1: move fast. Their American investors decided to take matters into 246 00:15:28,000 --> 00:15:31,920 Speaker 1: their own hands. They start back channeling with Trump administration 247 00:15:31,960 --> 00:15:36,280 Speaker 1: officials including Jared Kushner and Steve minu Chin to drive 248 00:15:36,400 --> 00:15:38,920 Speaker 1: up the price of TikTok and to find a buyer 249 00:15:39,120 --> 00:15:44,320 Speaker 1: that Trump would deem acceptable. That buyer was Oracle. Oracle 250 00:15:44,400 --> 00:15:47,760 Speaker 1: is a big technology company that mostly built software products 251 00:15:47,840 --> 00:15:51,600 Speaker 1: for businesses, not social media, so they seemed like a 252 00:15:51,640 --> 00:15:55,800 Speaker 1: weird match for TikTok. What Oracle did have was a 253 00:15:55,840 --> 00:16:00,440 Speaker 1: lot of money and very close relationships with President Trump. 254 00:16:02,400 --> 00:16:06,800 Speaker 1: And if your TikTok, half the battle is bringing Trump 255 00:16:06,920 --> 00:16:09,720 Speaker 1: a deal that he will approve, and so I think 256 00:16:09,720 --> 00:16:14,040 Speaker 1: there was some feeling that if Oracle were to make 257 00:16:14,080 --> 00:16:17,080 Speaker 1: a bid, it might be more likely to get his 258 00:16:17,440 --> 00:16:21,400 Speaker 1: stamp of approval. The relationship between Oracle and Trump was 259 00:16:21,440 --> 00:16:26,320 Speaker 1: pretty cozy. Oracle executives donated tens of thousands of dollars 260 00:16:26,320 --> 00:16:31,400 Speaker 1: to Trump's campaigns. It's CEO served on the president's transition team, 261 00:16:31,440 --> 00:16:34,280 Speaker 1: and the founder even lent Trump his own house in 262 00:16:34,360 --> 00:16:39,360 Speaker 1: California for a fundraiser. Oracle made a billion dollar offer 263 00:16:39,520 --> 00:16:43,520 Speaker 1: for TikTok's US business, but just when it looked like 264 00:16:43,520 --> 00:16:47,960 Speaker 1: a possible solution was on the table, another bomb was dropped. 265 00:16:48,400 --> 00:16:51,800 Speaker 1: The CEO of TikTok has resigned. Kevin Mayer led the 266 00:16:51,800 --> 00:16:55,160 Speaker 1: company for just three months. Mayor said, quote, the political 267 00:16:55,240 --> 00:16:58,840 Speaker 1: environment has sharply changed. He says he's thought about what 268 00:16:58,880 --> 00:17:00,960 Speaker 1: the next phase of TikTok is going to look like, 269 00:17:01,240 --> 00:17:05,880 Speaker 1: and it's not going to include him. I call TikTok, 270 00:17:06,000 --> 00:17:08,879 Speaker 1: I call sources, and I'm like, what the heck is 271 00:17:08,880 --> 00:17:12,640 Speaker 1: going on? And very quickly learned that he had just 272 00:17:12,840 --> 00:17:17,280 Speaker 1: emailed um the company to say that he was stepping down, 273 00:17:17,520 --> 00:17:21,320 Speaker 1: and this was not only shocking because he had only 274 00:17:21,359 --> 00:17:24,439 Speaker 1: been there a short amount of time, But Kevin is 275 00:17:24,480 --> 00:17:28,240 Speaker 1: not a low key higher, if you will, like, he 276 00:17:28,359 --> 00:17:32,439 Speaker 1: was a really big deal. He was a longtime executive 277 00:17:32,480 --> 00:17:36,119 Speaker 1: at Disney. He was incredibly successful there, and it was 278 00:17:36,160 --> 00:17:40,160 Speaker 1: a pretty um dramatic exit. I love that you categorize 279 00:17:40,160 --> 00:17:43,240 Speaker 1: it as not a low key higher because I remember 280 00:17:43,359 --> 00:17:45,960 Speaker 1: that as soon as he was hired, they started talking 281 00:17:45,960 --> 00:17:49,800 Speaker 1: about their American CEO who lives in Los Angeles, and 282 00:17:50,200 --> 00:17:53,080 Speaker 1: you know, they really attached themselves on this all American 283 00:17:53,280 --> 00:17:56,920 Speaker 1: CEO image. And in the end, you know, he only 284 00:17:56,960 --> 00:18:00,880 Speaker 1: spent three months there and giving has been way way 285 00:18:00,920 --> 00:18:03,719 Speaker 1: more time trying to find the perfect CEO, and then 286 00:18:03,760 --> 00:18:06,919 Speaker 1: they find him and then he leaves after a hundred days. 287 00:18:07,560 --> 00:18:11,120 Speaker 1: And I also remember that Kevin wasn't really a good 288 00:18:11,160 --> 00:18:14,800 Speaker 1: fit with the company's corporate culture. The CEO, John Giming 289 00:18:14,840 --> 00:18:18,280 Speaker 1: at by Dwans, really wanted to hire this corporate soldier, 290 00:18:18,480 --> 00:18:21,480 Speaker 1: this American face, who would kind of right the ship 291 00:18:21,760 --> 00:18:24,240 Speaker 1: in the US and kind of do what he's told, 292 00:18:24,720 --> 00:18:27,439 Speaker 1: and that it didn't really work out that way because 293 00:18:27,600 --> 00:18:29,720 Speaker 1: Kevin really wanted to have a say in all the 294 00:18:29,800 --> 00:18:34,359 Speaker 1: different decisions, and later on sources told me that I 295 00:18:34,480 --> 00:18:39,560 Speaker 1: mean told co workers that he regretted hiring Kevin. TikTok 296 00:18:39,600 --> 00:18:43,440 Speaker 1: declined to comment on Kevin Mayer's departure. A few months 297 00:18:43,480 --> 00:18:46,479 Speaker 1: after he stepped down, Kevin spoke to my colleague Emily 298 00:18:46,560 --> 00:18:50,000 Speaker 1: Chang on Bloomberg TV, why did you leave and and 299 00:18:50,040 --> 00:18:53,040 Speaker 1: do you have any regrets about that? I left because 300 00:18:53,720 --> 00:18:57,399 Speaker 1: the job that I had, that I had signed up 301 00:18:57,400 --> 00:18:59,920 Speaker 1: for and that I was I was I was doing, 302 00:19:00,680 --> 00:19:03,400 Speaker 1: looked like it was not going to exist anymore, and 303 00:19:03,640 --> 00:19:04,960 Speaker 1: you know, there was going to be a deal with 304 00:19:05,280 --> 00:19:08,720 Speaker 1: Microsoft or Oraculture got to the Oracle, and at that 305 00:19:08,760 --> 00:19:11,800 Speaker 1: time it seems like the right time for me to depart. 306 00:19:12,280 --> 00:19:14,960 Speaker 1: I don't want to rehash that too much. Why do 307 00:19:14,960 --> 00:19:19,920 Speaker 1: you think US politicians get wrong about TikTok Um. Look, 308 00:19:19,920 --> 00:19:26,200 Speaker 1: I think they think that TikTok is Um is controlled 309 00:19:26,200 --> 00:19:28,480 Speaker 1: by the Chinese government, and I just never found it 310 00:19:28,520 --> 00:19:30,200 Speaker 1: to be the case. I think the team in China 311 00:19:30,240 --> 00:19:32,639 Speaker 1: has done a great job of it. In Kevin's place, 312 00:19:33,000 --> 00:19:36,600 Speaker 1: by Dance's CEO, John gi Ming elevates an executive named 313 00:19:36,640 --> 00:19:40,679 Speaker 1: Vanessa Papa's She's run big parts of TikTok for years, 314 00:19:41,480 --> 00:19:44,280 Speaker 1: and she wrote the playbook on turning social media fame 315 00:19:44,760 --> 00:19:48,280 Speaker 1: into a career. But she's been passed over multiple times 316 00:19:48,359 --> 00:19:51,960 Speaker 1: for the top job at TikTok. Still, Vanessa has stayed 317 00:19:52,000 --> 00:19:55,439 Speaker 1: loyal to Ming. I interviewed her over the phone. I 318 00:19:55,520 --> 00:19:58,719 Speaker 1: just have to ask, because it's my job. What's the latest? 319 00:19:58,920 --> 00:20:01,360 Speaker 1: If you can say anything that the deal note negotiations 320 00:20:01,359 --> 00:20:02,920 Speaker 1: of whether or not will be an answer by the 321 00:20:03,119 --> 00:20:08,320 Speaker 1: STEM I cannot share, but understand you have to ask 322 00:20:10,040 --> 00:20:14,280 Speaker 1: fair enough. Vanessa wasn't giving away much, but she did 323 00:20:14,320 --> 00:20:18,200 Speaker 1: allude to a change unfolding it. TikTok eating had been 324 00:20:18,240 --> 00:20:22,000 Speaker 1: cooperating with the sell off of his company, but Vanessa 325 00:20:22,040 --> 00:20:25,439 Speaker 1: indicated that he could be shifting away from that mindset. No. 326 00:20:25,640 --> 00:20:28,800 Speaker 1: I think we've been really strong in our statements. So 327 00:20:29,119 --> 00:20:31,919 Speaker 1: you know, we have expressed that we disagree with the 328 00:20:31,960 --> 00:20:36,159 Speaker 1: executive order. UM, we are pursuing a number of pass 329 00:20:36,240 --> 00:20:40,679 Speaker 1: forward and we are positive in that, you know, we 330 00:20:40,880 --> 00:20:43,919 Speaker 1: think we'll have a positive outcome. Heres Vanessa telling me 331 00:20:44,040 --> 00:20:47,199 Speaker 1: they might have a positive outcome was revealing. It was 332 00:20:47,280 --> 00:20:50,159 Speaker 1: the first hint that TikTok thought they might not have 333 00:20:50,240 --> 00:20:53,600 Speaker 1: to cave to Trump's demands. After all, TikTok was gearing 334 00:20:53,680 --> 00:20:56,359 Speaker 1: up for a fight. After months of being kicked around 335 00:20:56,359 --> 00:21:00,280 Speaker 1: by the White House, the company starts running television ad 336 00:21:00,280 --> 00:21:04,199 Speaker 1: to say so easy to make, almost as if they 337 00:21:04,200 --> 00:21:08,920 Speaker 1: were taunting the President, using the ban as a marketing ploy. Today, 338 00:21:09,000 --> 00:21:11,399 Speaker 1: years old, it works. I can't believe I learned all 339 00:21:11,400 --> 00:21:15,280 Speaker 1: that on here. TikTok could go away at any moment, 340 00:21:15,600 --> 00:21:18,240 Speaker 1: so you better get it now. This drove a huge 341 00:21:18,280 --> 00:21:22,160 Speaker 1: spike in downloads and revenue. Next TikTok takes the fight 342 00:21:22,200 --> 00:21:26,880 Speaker 1: to court. There were three separate lawsuits from TikTok, its users, 343 00:21:27,080 --> 00:21:30,760 Speaker 1: and its employees. I spoke to Patrick Ryan, He's a 344 00:21:30,800 --> 00:21:34,119 Speaker 1: TikTok engineer behind one of the lawsuits. He told me 345 00:21:34,160 --> 00:21:38,399 Speaker 1: he felt personally attacked by Trump's executive orders. He didn't 346 00:21:38,440 --> 00:21:41,720 Speaker 1: like being accused of sending data on Americans over to China. 347 00:21:42,320 --> 00:21:45,960 Speaker 1: I thought about these accusations, so when I read through 348 00:21:45,960 --> 00:21:50,240 Speaker 1: those things, I read those accusations not as being accusations 349 00:21:50,240 --> 00:21:52,560 Speaker 1: just against the company, but his accusations against me, you know, 350 00:21:52,640 --> 00:21:56,400 Speaker 1: as a employee of the company and in a position 351 00:21:57,520 --> 00:22:00,959 Speaker 1: to know. Patrick says is in a position to know 352 00:22:01,200 --> 00:22:04,720 Speaker 1: because he works in data security. He joined TikTok just 353 00:22:04,840 --> 00:22:08,320 Speaker 1: months before Trump announced the band. Patrick left behind a 354 00:22:08,400 --> 00:22:11,480 Speaker 1: cushy job at Google. He was one of hundreds of 355 00:22:11,480 --> 00:22:15,440 Speaker 1: TikTok employees who joined after the pandemic. Many had never 356 00:22:15,520 --> 00:22:19,119 Speaker 1: met their colleagues in person. They were already feeling vulnerable 357 00:22:19,200 --> 00:22:22,720 Speaker 1: when the President started attacking their employer for something they 358 00:22:22,760 --> 00:22:25,760 Speaker 1: didn't even believe they were doing wrong. I feel like 359 00:22:26,000 --> 00:22:28,280 Speaker 1: I'm in the middle of a square and you know, 360 00:22:28,280 --> 00:22:29,679 Speaker 1: there's just a couple of us, and I feel like 361 00:22:29,720 --> 00:22:32,639 Speaker 1: we're getting kicked. And I feel like a lot of 362 00:22:32,640 --> 00:22:36,359 Speaker 1: people are watching and they're not doing anything because they 363 00:22:36,400 --> 00:22:39,920 Speaker 1: think that maybe we deserve it if they haven't seen 364 00:22:39,920 --> 00:22:43,760 Speaker 1: any evidence. So Patrick sued the Trump administration on behalf 365 00:22:43,760 --> 00:22:47,960 Speaker 1: of TikTok employees, and then there was another even more 366 00:22:48,080 --> 00:22:52,360 Speaker 1: powerful lawsuit from the TikTok users themselves, Becasette and I'm 367 00:22:52,400 --> 00:22:55,480 Speaker 1: suing Trump. What does this mean? That's Kasette Nab in 368 00:22:55,520 --> 00:22:58,920 Speaker 1: a TikTok video. She was one of three TikTok creators 369 00:22:58,960 --> 00:23:01,200 Speaker 1: that sued the Trump and Illustration to put a stop 370 00:23:01,240 --> 00:23:03,359 Speaker 1: to the band. Tick talk is all about using your 371 00:23:03,400 --> 00:23:05,399 Speaker 1: voice to reach a global audience, and this is what 372 00:23:05,480 --> 00:23:08,120 Speaker 1: the First Amendment is all about the president's executive order 373 00:23:08,240 --> 00:23:11,240 Speaker 1: is violating our freedom of speech. And this lawsuit looked 374 00:23:11,320 --> 00:23:15,439 Speaker 1: like a grassroots effort, but it wasn't. Sources told me 375 00:23:15,480 --> 00:23:19,400 Speaker 1: that TikTok recruited creators to file the lawsuit, connected them 376 00:23:19,400 --> 00:23:24,119 Speaker 1: with powerful First Amendment lawyers, and help craft the legal strategy. 377 00:23:24,440 --> 00:23:28,720 Speaker 1: In essence, TikTok orchestrated the whole thing. When I asked 378 00:23:28,720 --> 00:23:31,760 Speaker 1: the company about this, they didn't want to comment. My 379 00:23:31,880 --> 00:23:34,800 Speaker 1: sources told me that this lawsuit played right into a 380 00:23:34,840 --> 00:23:39,120 Speaker 1: calculated strategy by TikTok to cultivate a group of everyday 381 00:23:39,119 --> 00:23:42,719 Speaker 1: Americans who use the app, depend on the app, and 382 00:23:42,720 --> 00:23:45,359 Speaker 1: we'll speak out in defense of TikTok. You want to 383 00:23:45,359 --> 00:23:52,639 Speaker 1: make sure that you've got a array of validators and 384 00:23:52,680 --> 00:23:56,160 Speaker 1: in some cases amplifiers of your message that are going 385 00:23:56,440 --> 00:24:00,840 Speaker 1: to have influence in the US market. That's Brett Bruin. 386 00:24:01,200 --> 00:24:04,280 Speaker 1: He's a crisis manager who was watching these lawsuits closely. 387 00:24:04,760 --> 00:24:09,239 Speaker 1: Brett served as a diplomat under President Obama. There is 388 00:24:09,320 --> 00:24:14,240 Speaker 1: not any better strategy that I can think of than 389 00:24:14,760 --> 00:24:20,960 Speaker 1: to get the most influential voices and align them with 390 00:24:21,080 --> 00:24:27,119 Speaker 1: my product, align them with my policy preferences. So it 391 00:24:27,320 --> 00:24:34,840 Speaker 1: is not TikTok versus Trump. It is this army of influencers, 392 00:24:34,960 --> 00:24:38,359 Speaker 1: and this is a lawsuit that worked. The judge sided 393 00:24:38,400 --> 00:24:41,000 Speaker 1: with the creators and put a temporary block on the band. 394 00:24:41,880 --> 00:24:45,159 Speaker 1: And the most ironic part to me was, here's Byte Dance, 395 00:24:45,280 --> 00:24:49,119 Speaker 1: this company from China where speech is highly censored, and 396 00:24:49,119 --> 00:24:52,680 Speaker 1: they're leaning on the US Constitution the right to free speech. 397 00:24:53,640 --> 00:24:56,360 Speaker 1: So TikTok got a reprieve from the band, but there 398 00:24:56,440 --> 00:24:59,680 Speaker 1: was still the matter of the sale. We'll be right back. 399 00:25:09,000 --> 00:25:11,879 Speaker 1: One afternoon in September, I got an email from my 400 00:25:11,920 --> 00:25:16,119 Speaker 1: colleague who reports on Microsoft. It said hearing from a 401 00:25:16,160 --> 00:25:18,879 Speaker 1: source that something deal wise is likely to be announced 402 00:25:18,920 --> 00:25:23,760 Speaker 1: later today. So um, get ready everyone. I started making 403 00:25:23,920 --> 00:25:26,840 Speaker 1: frantic calls to all my sources to try to find 404 00:25:26,840 --> 00:25:29,640 Speaker 1: out what happened. We were the first to find out 405 00:25:29,680 --> 00:25:33,480 Speaker 1: that Oracle had pulled ahead. Minutes later we got word 406 00:25:33,560 --> 00:25:38,280 Speaker 1: Microsoft was out, and weirdly enough, the deal wasn't announced 407 00:25:38,280 --> 00:25:44,000 Speaker 1: by TikTok or Oracle, but by US Treasury Secretary Steve Manuchin. 408 00:25:44,960 --> 00:25:46,639 Speaker 1: I want to be careful what I say, but I 409 00:25:46,640 --> 00:25:49,760 Speaker 1: will confirm we did get a proposal over the weekend 410 00:25:50,280 --> 00:25:54,560 Speaker 1: that includes Oracle as the trusted technology partner with Oracle, 411 00:25:54,760 --> 00:25:57,880 Speaker 1: And once we started digging into the deal, we realized 412 00:25:57,920 --> 00:26:02,200 Speaker 1: this wasn't really a sale of tick Talk. Instead, TikTok 413 00:26:02,240 --> 00:26:05,600 Speaker 1: had come up with some crafty corporate restructuring where they 414 00:26:05,640 --> 00:26:09,280 Speaker 1: would spin off a new company called TikTok Global and 415 00:26:09,320 --> 00:26:12,600 Speaker 1: sell a steak in this new company to Oracle and 416 00:26:12,640 --> 00:26:16,560 Speaker 1: its partners. As for ye Ming by Dance and their investors, 417 00:26:17,080 --> 00:26:20,080 Speaker 1: they would keep eighty per cent of the company. E 418 00:26:20,240 --> 00:26:24,400 Speaker 1: Ming would continue to wield outsize power on the company's decisions. 419 00:26:25,280 --> 00:26:27,440 Speaker 1: We were shocked at this deal with the Oracle, even 420 00:26:27,520 --> 00:26:31,160 Speaker 1: past muster with the Trump administration, because it didn't address 421 00:26:31,200 --> 00:26:33,560 Speaker 1: the fact that TikTok is still a majority owned by 422 00:26:33,680 --> 00:26:37,760 Speaker 1: Chinese company. But apparently Oracle was able to convince Trump. 423 00:26:38,440 --> 00:26:41,760 Speaker 1: Here's Kurt, we should have known all along that the 424 00:26:41,840 --> 00:26:43,640 Speaker 1: deal was going to go to the people who were 425 00:26:43,680 --> 00:26:48,520 Speaker 1: closest to the president. And I remember being so confused 426 00:26:48,560 --> 00:26:52,520 Speaker 1: because this was nothing that Trump had wanted. And so 427 00:26:53,840 --> 00:26:56,440 Speaker 1: I remember being like, wait a second, but Trump said, 428 00:26:56,520 --> 00:26:59,760 Speaker 1: I wanted this to be owned by US company and 429 00:26:59,800 --> 00:27:02,879 Speaker 1: for to be completely spun off away from China, away 430 00:27:02,880 --> 00:27:06,720 Speaker 1: from Bye Dances CEO John Gimming, And this was not 431 00:27:06,880 --> 00:27:11,000 Speaker 1: that it was not that you start to also come 432 00:27:11,040 --> 00:27:15,879 Speaker 1: to the realization that perhaps this wasn't really the security 433 00:27:15,960 --> 00:27:19,480 Speaker 1: threat that it was painted to be. Right. If that 434 00:27:19,520 --> 00:27:22,680 Speaker 1: were the case, then you would think that it would 435 00:27:22,720 --> 00:27:26,040 Speaker 1: require byte Dance to be completely removed from the equation. 436 00:27:27,359 --> 00:27:30,760 Speaker 1: So even though byte Dance was sidestepping most of Trump's demands, 437 00:27:31,160 --> 00:27:33,720 Speaker 1: it appeared to be good enough for Trump. But what 438 00:27:33,880 --> 00:27:37,520 Speaker 1: happened to Microsoft? They were the first to express interests 439 00:27:37,520 --> 00:27:40,840 Speaker 1: in TikTok. They were all those secret meetings between the 440 00:27:40,880 --> 00:27:45,919 Speaker 1: two companies. Later, Microsoft CEO Satyn Adela sat down with 441 00:27:45,960 --> 00:27:49,520 Speaker 1: my colleague Emily Chang. Microsoft tried to buy TikTok and 442 00:27:49,560 --> 00:27:52,680 Speaker 1: it didn't happen. Why did you want to buy TikTok? 443 00:27:53,359 --> 00:27:55,960 Speaker 1: We had a very crisp vision for what we would 444 00:27:56,040 --> 00:27:59,080 Speaker 1: want to do with it, uh and including, for example, 445 00:27:59,160 --> 00:28:02,119 Speaker 1: addressing some of the very real concerns around national security. 446 00:28:02,280 --> 00:28:04,720 Speaker 1: But that was the last summer and we moved on. 447 00:28:05,160 --> 00:28:09,040 Speaker 1: He doesn't sound that sad that Microsoft lost out. Sources 448 00:28:09,080 --> 00:28:12,120 Speaker 1: told us that Microsoft felt this new deal was not 449 00:28:12,240 --> 00:28:16,080 Speaker 1: what they had bargained for. Microsoft wanted in when TikTok 450 00:28:16,119 --> 00:28:19,119 Speaker 1: would be theirs, and there is a loan. They didn't 451 00:28:19,119 --> 00:28:23,000 Speaker 1: want to own a minority stake, So Oracle wins the bid, 452 00:28:23,320 --> 00:28:26,400 Speaker 1: and Trump tells reporters he gave the deal his blessing. 453 00:28:27,119 --> 00:28:30,320 Speaker 1: Here's Trump in front of his blaring helicopter. We have 454 00:28:30,560 --> 00:28:36,159 Speaker 1: some very big news on TikTok. TikTok is moving along. 455 00:28:36,160 --> 00:28:40,080 Speaker 1: We're dealing with Oracle. But we'll see whether or not 456 00:28:40,160 --> 00:28:43,720 Speaker 1: at all happens. But perceptually, I think it's a great 457 00:28:43,760 --> 00:28:47,880 Speaker 1: deal for America. It will have nothing to do with China. 458 00:28:48,640 --> 00:28:51,800 Speaker 1: It'll be totally secure. But that would be the last 459 00:28:51,840 --> 00:28:55,720 Speaker 1: time we hear Trump talked publicly about TikTok. He moved on. 460 00:28:56,640 --> 00:29:01,240 Speaker 1: Sources told me White House officials wouldn't even hern TikTok's calls. 461 00:29:02,160 --> 00:29:04,400 Speaker 1: In a way, this was kind of a stroke of 462 00:29:04,480 --> 00:29:08,479 Speaker 1: luck for you, Ming. Here's Kurt. I think President Trump 463 00:29:08,520 --> 00:29:13,560 Speaker 1: and his administration got sidetracked. I think that the election 464 00:29:13,880 --> 00:29:16,960 Speaker 1: was upcoming. I think it was shortly after this that 465 00:29:17,160 --> 00:29:21,880 Speaker 1: the president got the coronavirus and was suddenly kind of 466 00:29:21,920 --> 00:29:26,640 Speaker 1: out of commission for a few days. And this type 467 00:29:26,640 --> 00:29:30,520 Speaker 1: of thing which he had made sure the administration was 468 00:29:30,640 --> 00:29:35,040 Speaker 1: right in the middle of suddenly couldn't move forward without 469 00:29:35,120 --> 00:29:39,600 Speaker 1: their cooperation, and so this deal that never crossed the 470 00:29:39,600 --> 00:29:43,200 Speaker 1: finish line because there was no one there to usher 471 00:29:43,240 --> 00:29:46,760 Speaker 1: it through. And then we're kind of stuck when our 472 00:29:46,880 --> 00:29:49,880 Speaker 1: editors asking every day, like what's happening, what's happening, And 473 00:29:49,960 --> 00:29:53,440 Speaker 1: meanwhile there was an election. Trump moves on to other 474 00:29:53,520 --> 00:29:57,400 Speaker 1: fights and other challenges, and he leaves office, and he 475 00:29:57,480 --> 00:30:00,240 Speaker 1: leaves office without a deal, and we never get really 476 00:30:00,280 --> 00:30:04,600 Speaker 1: the ending of the story. I think that this is 477 00:30:05,360 --> 00:30:10,840 Speaker 1: a totally frustrating chapter in the Trump presidency. You know, 478 00:30:11,040 --> 00:30:15,880 Speaker 1: this was the business deal of the decade that never 479 00:30:16,040 --> 00:30:19,640 Speaker 1: actually happened. And what bothers me the most as a 480 00:30:19,680 --> 00:30:22,920 Speaker 1: reporter who spent years covering this story is that we 481 00:30:23,040 --> 00:30:25,040 Speaker 1: never got to the bottom of whether there was a 482 00:30:25,080 --> 00:30:28,760 Speaker 1: security threat posed by TikTok. We still don't have the answer. 483 00:30:30,240 --> 00:30:34,640 Speaker 1: Trump officially leaves office, Joe Biden becomes president, and his 484 00:30:34,720 --> 00:30:38,400 Speaker 1: administration makes it clear that TikTok is not a priority. 485 00:30:38,880 --> 00:30:42,040 Speaker 1: The Biden administration puts an official hold on the TikTok 486 00:30:42,120 --> 00:30:45,960 Speaker 1: sale process, the court proceedings, and the ban. He says 487 00:30:46,000 --> 00:30:50,040 Speaker 1: he'll look into the national security risks, but sources tell 488 00:30:50,120 --> 00:30:53,560 Speaker 1: us that's unlikely to happen anytime soon because Biden is 489 00:30:53,600 --> 00:30:57,680 Speaker 1: busy with coronavirus and the US economy. As for the 490 00:30:57,680 --> 00:31:01,920 Speaker 1: deal with Oracle, well, it's of fates, and it says 491 00:31:01,960 --> 00:31:06,080 Speaker 1: of this big monumental chapter in the company's history suddenly erased, 492 00:31:06,640 --> 00:31:10,800 Speaker 1: poof gone like it never even happened. And there's another 493 00:31:10,880 --> 00:31:14,880 Speaker 1: piece of context I think is important. In recent decades, 494 00:31:15,360 --> 00:31:18,760 Speaker 1: China has banned most US internet companies from operating in 495 00:31:18,800 --> 00:31:23,200 Speaker 1: the country, and in China there's less recourse to legal challenges, 496 00:31:23,880 --> 00:31:27,680 Speaker 1: but TikTok was able to capitalize on American freedoms. This 497 00:31:27,760 --> 00:31:30,840 Speaker 1: is a big reason why TikTok wasn't banned or sold 498 00:31:30,880 --> 00:31:34,760 Speaker 1: to a US company, because the US has democracy, an 499 00:31:34,760 --> 00:31:40,240 Speaker 1: independent court system, presidential elections, and now for the foreseeable future, 500 00:31:40,720 --> 00:31:44,680 Speaker 1: the US even has TikTok. I checked back in with 501 00:31:44,800 --> 00:31:47,760 Speaker 1: Katie Feeney, an eighteen year old TikTok star I spoke 502 00:31:47,800 --> 00:31:50,400 Speaker 1: to right after the band was announced. She had been 503 00:31:50,560 --> 00:31:53,640 Speaker 1: so upset, but when I called her up six months later, 504 00:31:54,160 --> 00:31:56,920 Speaker 1: to be completely honest, I forgot about it. I went 505 00:31:57,000 --> 00:32:02,840 Speaker 1: from like every day I was terrified and like going 506 00:32:02,920 --> 00:32:05,840 Speaker 1: crazy in my mind going back and forth and thought 507 00:32:05,920 --> 00:32:08,560 Speaker 1: about what I'm going to do once TikTok has gone 508 00:32:08,600 --> 00:32:11,560 Speaker 1: to just not even thinking about it at all. I 509 00:32:11,560 --> 00:32:14,280 Speaker 1: feel like it's like the stages of I guess, like 510 00:32:14,280 --> 00:32:17,480 Speaker 1: a breakup. I remember learning in school there's like denial 511 00:32:17,720 --> 00:32:22,000 Speaker 1: and then acceptance or anger, and there's all these different stages. 512 00:32:22,000 --> 00:32:24,200 Speaker 1: Like That's kind of what I felt like with TikTok. 513 00:32:24,240 --> 00:32:26,760 Speaker 1: It was like I was going through an awful breakup. 514 00:32:27,920 --> 00:32:30,120 Speaker 1: Katie wasn't the only one who felt like she was 515 00:32:30,160 --> 00:32:33,360 Speaker 1: going through a breakup. In the end, there were many 516 00:32:33,400 --> 00:32:38,400 Speaker 1: broken hearts. Trump got dumped, Microsoft got dumped, Oracle got dumped. 517 00:32:38,840 --> 00:32:43,080 Speaker 1: Here's Kurt. I think these were all worlds that are 518 00:32:43,320 --> 00:32:47,560 Speaker 1: used to getting their way, right. You have um the president, 519 00:32:47,760 --> 00:32:50,400 Speaker 1: you have some of the top venture capitalists and all 520 00:32:50,400 --> 00:32:53,440 Speaker 1: of technology. You have some of the top technology c 521 00:32:53,480 --> 00:32:56,360 Speaker 1: e o s, and you have the Chinese government. Right, 522 00:32:56,800 --> 00:32:59,560 Speaker 1: which of those groups usually loses? And the answer is 523 00:32:59,680 --> 00:33:02,280 Speaker 1: none of them. They're all used to winning, and they're 524 00:33:02,280 --> 00:33:04,160 Speaker 1: all used to kind of getting things to to go 525 00:33:04,240 --> 00:33:06,280 Speaker 1: the way they want. That's such a good point and 526 00:33:06,320 --> 00:33:09,959 Speaker 1: also underscores why the ending of this is so monumental 527 00:33:10,160 --> 00:33:12,920 Speaker 1: because all these people who are used to getting their way, 528 00:33:13,160 --> 00:33:14,920 Speaker 1: none of them got their way. The person who got 529 00:33:14,920 --> 00:33:18,480 Speaker 1: their way was the CEO a Bye Dance John Uming, 530 00:33:18,960 --> 00:33:22,120 Speaker 1: this Chinese entrepreneur who kind of came out of nowhere 531 00:33:22,280 --> 00:33:25,800 Speaker 1: and built this company and was able to, you know, 532 00:33:26,560 --> 00:33:30,560 Speaker 1: um win over all those all those different people, the 533 00:33:30,680 --> 00:33:34,360 Speaker 1: Bye Dance ceo one. When I go back and listen 534 00:33:34,440 --> 00:33:37,840 Speaker 1: to all my interviews, almost no one I spoke to, 535 00:33:38,120 --> 00:33:41,120 Speaker 1: but you mean would come out on top. Here's where Ima. 536 00:33:41,800 --> 00:33:45,520 Speaker 1: He's a very very rational person. He expected to be 537 00:33:45,560 --> 00:33:48,800 Speaker 1: a very tough journey, and that he understood that this 538 00:33:49,320 --> 00:33:53,280 Speaker 1: was a fight. You mean, might be unusually quiet and 539 00:33:53,360 --> 00:33:57,000 Speaker 1: meek for tech ceo, but he has the personality it 540 00:33:57,120 --> 00:34:01,200 Speaker 1: takes to write out the turbulence he perseveres. He prides 541 00:34:01,280 --> 00:34:06,120 Speaker 1: himself on delayed gratification, and you know, in a way, 542 00:34:06,120 --> 00:34:10,479 Speaker 1: he's a little massochistic, so he really has a like oll. 543 00:34:10,520 --> 00:34:13,360 Speaker 1: He prised himself on having a lot of patients and 544 00:34:13,560 --> 00:34:17,840 Speaker 1: um going after the really really difficult problems. This idea 545 00:34:17,920 --> 00:34:21,600 Speaker 1: of delayed gratification is kind of a stereotype about Chinese 546 00:34:21,600 --> 00:34:25,080 Speaker 1: executives and government officials that they can endure the short 547 00:34:25,160 --> 00:34:28,800 Speaker 1: term pain and wait out the US electoral cycle because 548 00:34:28,800 --> 00:34:33,200 Speaker 1: American politics are so temporary, and in China, Chi Jimping 549 00:34:33,320 --> 00:34:37,480 Speaker 1: has no term limits. He's making decisions for the decades ahead, 550 00:34:37,840 --> 00:34:41,759 Speaker 1: not forty five day decrees. But that's exactly what you mean. 551 00:34:41,880 --> 00:34:45,600 Speaker 1: Bet on that if he actually fought back against Trump, 552 00:34:45,960 --> 00:34:49,719 Speaker 1: pushed back against his own powerful investors, and delayed the 553 00:34:49,760 --> 00:34:53,239 Speaker 1: ban in court just long enough that Trump would get 554 00:34:53,280 --> 00:34:57,640 Speaker 1: distracted and lose interest. It took a lot of klutzbah, 555 00:34:58,120 --> 00:35:02,520 Speaker 1: but he means plan worked. He was proven right. As 556 00:35:02,560 --> 00:35:05,279 Speaker 1: for Alex jew, the founder who came up with so 557 00:35:05,320 --> 00:35:09,360 Speaker 1: many of the original ideas behind TikTok, he also managed 558 00:35:09,400 --> 00:35:12,560 Speaker 1: to hang on. He took a strategy and investment role 559 00:35:12,600 --> 00:35:15,000 Speaker 1: at Byte Dance, He helped Ming on the U S 560 00:35:15,040 --> 00:35:18,840 Speaker 1: TikTok deal, and even though Alex failed at politicking on 561 00:35:18,920 --> 00:35:22,480 Speaker 1: behalf of TikTok and got pushed aside for an American CEO, 562 00:35:23,239 --> 00:35:26,480 Speaker 1: in the end he outlasted Kevin Mayer, the guy hired 563 00:35:26,520 --> 00:35:30,560 Speaker 1: to replace him. Alex remains committed to that early vision 564 00:35:30,560 --> 00:35:38,480 Speaker 1: of TikTok he hatched on the train years ago. Several 565 00:35:38,520 --> 00:35:41,640 Speaker 1: months after Trump left office, e Ming installed a guy 566 00:35:41,760 --> 00:35:45,879 Speaker 1: named Showed Za Chew as a CEO of TikTok show 567 00:35:45,960 --> 00:35:48,960 Speaker 1: his connections in the West. He went to Harvard Business 568 00:35:48,960 --> 00:35:52,440 Speaker 1: School and worked at Goldman Sachs, but he speaks Chinese 569 00:35:52,520 --> 00:35:56,239 Speaker 1: and lives in Singapore. And not long after that you 570 00:35:56,440 --> 00:35:58,799 Speaker 1: Ming said he would be stepping down as CEO of 571 00:35:58,840 --> 00:36:01,560 Speaker 1: Byte Dance. He released a statement that I want to 572 00:36:01,600 --> 00:36:05,080 Speaker 1: read a few lines from. He wrote, the truth is 573 00:36:05,440 --> 00:36:08,040 Speaker 1: I lack some of the skills that make an ideal manager. 574 00:36:09,120 --> 00:36:13,480 Speaker 1: I'm more interested in analyzing organizational and market principles than 575 00:36:13,600 --> 00:36:19,759 Speaker 1: actually managing people. Similarly, I'm not very social, preferring solitary 576 00:36:19,800 --> 00:36:24,400 Speaker 1: activities like being a line, reading, listening to music, and 577 00:36:24,520 --> 00:36:29,160 Speaker 1: daydreaming about what may be possible. Eman says he'll stay 578 00:36:29,200 --> 00:36:32,200 Speaker 1: at the company to focus on long term strategy, but 579 00:36:32,280 --> 00:36:34,680 Speaker 1: our sources tell us that you Mean will still be 580 00:36:34,760 --> 00:36:38,360 Speaker 1: running the show by Dances gearing up for a massive 581 00:36:38,480 --> 00:36:41,000 Speaker 1: I p O that could make you Mean one of 582 00:36:41,000 --> 00:36:43,960 Speaker 1: the richest people in China. This would also put a 583 00:36:44,000 --> 00:36:47,200 Speaker 1: target on his back from the Chinese government, which has 584 00:36:47,239 --> 00:36:51,320 Speaker 1: been scrutinizing the country's wealthy tech moguls. This may be 585 00:36:51,440 --> 00:36:53,919 Speaker 1: the reason why Eming wants to lay low and take 586 00:36:53,920 --> 00:36:59,879 Speaker 1: a less public facing role. TikTok is still growing relentlessly. 587 00:37:00,880 --> 00:37:04,160 Speaker 1: Teams the world over are enraptured by it, and there's 588 00:37:04,200 --> 00:37:07,320 Speaker 1: no doubt in my mind it poses an existential threat 589 00:37:07,400 --> 00:37:11,680 Speaker 1: to Facebook, Google and Snapchat, because even as it gets bigger, 590 00:37:12,160 --> 00:37:15,200 Speaker 1: it keeps coming out with new features that get people hooked, 591 00:37:15,719 --> 00:37:19,520 Speaker 1: giving TikTok even more time, more money, and more data. 592 00:37:20,600 --> 00:37:23,759 Speaker 1: I wouldn't be surprised if pretty soon we see John 593 00:37:23,800 --> 00:37:27,480 Speaker 1: Yuman's face on a business biography like the ones he 594 00:37:27,560 --> 00:37:30,680 Speaker 1: used to read back in his college days. Because you 595 00:37:30,760 --> 00:37:34,520 Speaker 1: Mean achieved many firsts. First Chinese entrepreneur to build a 596 00:37:34,520 --> 00:37:38,440 Speaker 1: consumer app that became a global hit, first person to 597 00:37:38,480 --> 00:37:41,680 Speaker 1: get his private business almost banned by an American president, 598 00:37:42,520 --> 00:37:47,400 Speaker 1: first and only person to come out on top. You 599 00:37:47,520 --> 00:37:51,400 Speaker 1: Mean and Alex have fundamentally changed the perception of Chinese 600 00:37:51,400 --> 00:37:56,520 Speaker 1: tech companies. TikTok out smarted US competitors and President Trump. 601 00:37:56,960 --> 00:37:59,760 Speaker 1: The company used billions of dollars to flood the world 602 00:37:59,760 --> 00:38:02,359 Speaker 1: with a social media app no one had even heard 603 00:38:02,360 --> 00:38:06,680 Speaker 1: of just a few years ago. Ultimately, TikTok woke the 604 00:38:06,719 --> 00:38:10,320 Speaker 1: world up to the very real threat of competition from China. 605 00:38:11,360 --> 00:38:14,520 Speaker 1: The tech industry and the US government may not have 606 00:38:14,640 --> 00:38:18,600 Speaker 1: taken that threat seriously enough before, but they certainly are 607 00:38:18,640 --> 00:38:22,080 Speaker 1: now because the US had free reign over the global 608 00:38:22,160 --> 00:38:26,320 Speaker 1: Internet for so many decades without ever really having to compete, 609 00:38:27,080 --> 00:38:35,520 Speaker 1: and now TikTok proves that era has ended. Foundering is 610 00:38:35,560 --> 00:38:40,160 Speaker 1: hosted by me Shelley Banjo. Sean When is our executive producer. 611 00:38:40,840 --> 00:38:45,440 Speaker 1: Raymondo is our audio engineer. Molly Nugent is our associate producer. 612 00:38:46,080 --> 00:38:51,800 Speaker 1: Additional reporting by Kurt Wagner, Chipping Huang, Sarah Fryar, Dina Bass, 613 00:38:52,080 --> 00:38:56,840 Speaker 1: Brodie Ford, Tom Giles, and Mario Parker. Special thanks to 614 00:38:57,000 --> 00:39:02,280 Speaker 1: Edwin Chan, Peter Elstrom, Emily Chang, Jenny Leonard, Jennifer Jacobs, 615 00:39:02,320 --> 00:39:06,520 Speaker 1: and Salaja Molson. Our story editors are Mark Million and 616 00:39:06,760 --> 00:39:10,759 Speaker 1: Vander May and Molly Shoots. Francesca Levi is the head 617 00:39:10,760 --> 00:39:14,920 Speaker 1: of Bloomberg Podcasts. This is our last episode about TikTok, 618 00:39:15,719 --> 00:39:18,600 Speaker 1: but please stay subscribed in your feed. We'll have more 619 00:39:18,640 --> 00:39:21,480 Speaker 1: exciting episodes of Foundering in just a few months.