WEBVTT - Frank McCourt on TikTok's Future 

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>This is Bloomberg Business Week with Carol Messer and Tim

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<v Speaker 2>Stenebek on Bloomberg Radio. I think this might be a

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<v Speaker 2>first though. I'm looking at video of you right now.

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<v Speaker 2>You have taken to the skies. I believe you're in

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<v Speaker 2>an airplane. We're testing the limits of in flight Wi Fi.

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<v Speaker 2>What's what's going on right now?

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<v Speaker 3>Well, well, it sounds good on my end. Can you

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<v Speaker 3>hear me?

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<v Speaker 2>Sounds good, We can hear you, we can see you.

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<v Speaker 2>So so far the test looks good.

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<v Speaker 4>Is this starlink? Yeah?

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<v Speaker 2>What are you using? Actually, yeah, it's good.

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<v Speaker 1>Question. It's good Wi Fi though. That's all I can

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<v Speaker 1>tell you. So it's uh, it works well and it sufficient.

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<v Speaker 1>So I'm glad this is the first for you guys.

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<v Speaker 1>But let's get to Project Liberty and the People's Bid.

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<v Speaker 2>Okay, let's get to the People's Bid, and I will

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<v Speaker 2>not for people watching on YouTube and Bloomberg originals. You

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<v Speaker 2>can tell the plane that Frank is in. It's not

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<v Speaker 2>the typical plane that you take and board, you know,

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<v Speaker 2>group ones one through twelve. Frank travels differently. So, Frank,

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<v Speaker 2>we do appreciate you taking the time. Let's talk about

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<v Speaker 2>the people's bid here, because last time you were on

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<v Speaker 2>the show with us, you had not put out a

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<v Speaker 2>bid for TikTok. Are you still going for it? And

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<v Speaker 2>do you have the money?

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<v Speaker 1>Yeah, we're still going for it and we have the money.

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<v Speaker 1>So it's we're we're plowing ahead. Every day it looks,

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<v Speaker 1>you know, more and like we're leading more and more,

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<v Speaker 1>like we're leading the path, you know, should the the

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<v Speaker 1>US TikTok be sold, and we believe it will be,

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<v Speaker 1>and we're all awaiting the judge's decision, which you could

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<v Speaker 1>come out as early as this week. And you know,

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<v Speaker 1>we believe the government's position is going to be upheld

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<v Speaker 1>and by Dance is going to have to abide by

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<v Speaker 1>that and and you know, shut shut down the app

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<v Speaker 1>or sell it. And so we have been working hard

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<v Speaker 1>making preparations to put ourselves in a position to to

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<v Speaker 1>buy the app and move it over to a new

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<v Speaker 1>protocol where individuals, you know, have owner control their identity

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<v Speaker 1>and their data and they're not, you know, Surveiled twenty

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<v Speaker 1>four seven.

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<v Speaker 2>Why do you believe that the sale will still be

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<v Speaker 2>required even though the President elect has said he doesn't

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<v Speaker 2>want to ban TikTok.

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<v Speaker 1>Well, we don't want to ban TikTok either, and I'm

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<v Speaker 1>glad to hear him say that, because we don't think

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<v Speaker 1>it's to be banned. And you know, there's one hundred

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<v Speaker 1>and seventy million people tim using it that enjoy using it,

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<v Speaker 1>and uh, and we want to keep the TikTok alive.

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<v Speaker 3>But he President hasn't said it won't be sold.

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<v Speaker 1>I mean, I think he's well aware of the national

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<v Speaker 1>security risks and uh. You know, Congress acted very quickly

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<v Speaker 1>and in a rare moment of consensus, legislated that this

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<v Speaker 1>this app is dangerous for.

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<v Speaker 3>Americans and needs to be shut down or sold.

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<v Speaker 1>And the President has said he doesn't want to see

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<v Speaker 1>it shut down and and we, like him, uh, don't

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<v Speaker 1>want to see it shut down either, and we believe

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<v Speaker 1>it will be sold and no longer being in Chinese

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<v Speaker 1>hands after this.

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<v Speaker 3>Uh the court ruling.

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<v Speaker 4>What problems with TikTok are you looking to solve directify

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<v Speaker 4>through the people's bid?

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<v Speaker 1>Well, the the reason why the Congress that's the legislation

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<v Speaker 1>in the first place, is because they deemed TikTok a

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<v Speaker 1>national security threat and you know, amongst other things, by

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<v Speaker 1>bailing one hundred and seventy million Americans and uh, scraping

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<v Speaker 1>their their data, their you know, their personal information, and

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<v Speaker 1>also feeding them information that's favorable to the Chinese government

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<v Speaker 1>and not so favorable to to to America or to

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<v Speaker 1>the USA, to our democracy and and so forth. It's

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<v Speaker 1>it's really a huge propaganda machine that is that is

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<v Speaker 1>influencing lots of Americans, uh, you know, by feeding them

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<v Speaker 1>false information about about an array of situations that are

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<v Speaker 1>and the information that's fed is is amplified as a

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<v Speaker 1>pro Chinese perspective as opposed to a anti American and

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<v Speaker 1>by the way, anti American ones. So it's not a

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<v Speaker 1>balanced platform. It's actually being used by the Chinese government

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<v Speaker 1>to persuade Americans approach anti American positions. That's extremely, extremely unhealthy.

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<v Speaker 1>And beyond that, it's a surveillance tool. And this is

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<v Speaker 1>you know, this is very very dangerous for American and Americans.

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<v Speaker 3>So with.

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<v Speaker 1>By moving the TikTok user base onto the protocol and

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<v Speaker 1>the platform that Project Liberty has built over the last

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<v Speaker 1>five years, users won't be surveilled. They'll own and control

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<v Speaker 1>their identity, they'll own and control their data, they'll be

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<v Speaker 1>able to get compensated for the use of their data

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<v Speaker 1>and they'll permission a cheuse. So it's just the opposite

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<v Speaker 1>of a surveillance machine.

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<v Speaker 2>Frank, have you who have you lined up to join

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<v Speaker 2>you in the bed? Bloomberg Intelligence has said back in

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<v Speaker 2>May that TikTok's US assets were valued at between thirty

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<v Speaker 2>five billion and forty billion dollars, So who have you

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<v Speaker 2>lined up to help with the bid?

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<v Speaker 1>You know, we think we think that number is a

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<v Speaker 1>bit high. But to you know, to be clear, we

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<v Speaker 1>don't know what TikTok or byte dance rather will be selling, right.

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<v Speaker 1>We don't know whether they'll be selling the brand or not.

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<v Speaker 1>The user base is what we're particularly interested in. We're

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<v Speaker 1>assuming they'll sell they'll sell that, Will they be selling

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<v Speaker 1>the content and so on and so forth. We think

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<v Speaker 1>that thirty to forty billion numbers is a bit high.

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<v Speaker 1>We've circled over twenty billion dollars and we're prepared to

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<v Speaker 1>move forward and we'll see. Maybe they'll be more sold

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<v Speaker 1>than we're anticipating and that will affect the price. But

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<v Speaker 1>we do know that the algorithm byte Dance algorithm is

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<v Speaker 1>not available, and that has a huge impact on the

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<v Speaker 1>value of us TikTok, and it depresses the value.

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<v Speaker 2>That part certainly makes sense. Can you give us some

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<v Speaker 2>names of individuals though, who've lined up to finance this?

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<v Speaker 1>No, I'm not in a position to do that until

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<v Speaker 1>after we hear from the judges, because all of the

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<v Speaker 1>people that lined up and said, let's let's wait and

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<v Speaker 1>see what that legal decision is and then and then proceed.

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<v Speaker 1>So we're getting all of our ducks in a line,

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<v Speaker 1>and we will be naming names at the appropriate time

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<v Speaker 1>and the appropriate place. But we're going to take this

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<v Speaker 1>one step up at a time. It makes no sense

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<v Speaker 1>to put people just start throwing names around prior to

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<v Speaker 1>this legal decision. But once this decision comes down, which

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<v Speaker 1>we think is imminent by the way, then things get

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<v Speaker 1>really serious.

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<v Speaker 3>And that's when we are going to move very very quickly.

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<v Speaker 1>And I assume others, if they're if they're interested, will

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<v Speaker 1>as well. But we haven't actually heard of anyone else

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<v Speaker 1>that's a serious bidder at this moment in time.

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<v Speaker 2>Frank, if you're not if you're not able to get

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<v Speaker 2>the algorithm, I mean a lot of people argue that

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<v Speaker 2>the TikTok algorithm is the secret sauce. It's what it

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<v Speaker 2>is what keeps people going back to TikTok over and

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<v Speaker 2>over again and staring at their screens for you know,

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<v Speaker 2>hours a day. If you don't get that, how do

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<v Speaker 2>you know people are going to stay and use the app?

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<v Speaker 3>The the.

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<v Speaker 1>We have people right now working on alternatives to that,

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<v Speaker 1>and and we just are believed very very strongly that

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<v Speaker 1>a surveilling people, straping their data and applying algorithms to

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<v Speaker 1>feed them information and manipulate them, take advantage of them,

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<v Speaker 1>and so on and so forth is incredibly unhealthy.

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<v Speaker 3>By the way, this is the same way that that

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<v Speaker 3>that our own American.

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<v Speaker 1>Made social media apps and so forth work, which we

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<v Speaker 1>think is also very dangerous. But in this particular case

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<v Speaker 1>there's also the added national security risks that I referred

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<v Speaker 1>to earlier. So the way we're not interested in the algorithm,

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<v Speaker 1>the technology we've built doesn't rely on the algorithm. There

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<v Speaker 1>will be algorithms, there will be ads, there will be

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<v Speaker 1>but it won't be top down targeting people and and

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<v Speaker 1>surveilling people. It will be an Internet where people signal

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<v Speaker 1>their interests, permission the use of their data, and are

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<v Speaker 1>still going to be able to enjoy using the application,

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<v Speaker 1>They're still going to be able to do all the

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<v Speaker 1>things that you can currently do with TikTok shop and

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<v Speaker 1>so on and so forth, and it just it won't

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<v Speaker 1>be in an exploitive way. It will be in a

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<v Speaker 1>way that empowers the user base. And by the way,

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<v Speaker 1>we want to involve the user base in the ownership

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<v Speaker 1>of the platform. And it's one of the reasons why

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<v Speaker 1>we call it the People's Bid. I want to be

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<v Speaker 1>clear there. I'm not interested in being the CEO of

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<v Speaker 1>US TikTok, and we have a management team lined up

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<v Speaker 1>and we have people lined up to go ahead and

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<v Speaker 1>do this. We need to wait for the judge's decision,

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<v Speaker 1>which we hope will be coming down as early as

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<v Speaker 1>Friday of this week.

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<v Speaker 4>Frank, you had mentioned US tech companies in US social

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<v Speaker 4>media companies. I wanted to get your thoughts on AI

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<v Speaker 4>and whether you think these comempanies in the US have

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<v Speaker 4>a grasp on artificial intelligence and the rise of it,

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<v Speaker 4>or whether you think it's really growing faster than you

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<v Speaker 4>know what the biggest companies in the US can can handle.

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<v Speaker 1>Yeah, I have great, great concerns about generative AI and

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<v Speaker 1>larger language models with the current uh uh tech architecture.

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<v Speaker 1>And what I mean by that is that generaty of

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<v Speaker 1>AI is is a fancy name or a more powerful

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<v Speaker 1>version of the technology we have right, which is a

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<v Speaker 1>technology that accumulates personal data and which is which is

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<v Speaker 1>the valuable data and applies algorithms which, by.

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<v Speaker 3>The way, our AI and you know to that to go.

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<v Speaker 1>Ahead and uh you know, exploit us right? And why

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<v Speaker 1>on earth, knowing now that the Internet as design is broken,

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<v Speaker 1>I mean we hear about the the.

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<v Speaker 3>Harms every single day.

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<v Speaker 1>Knowing that it's broken, why would we take the same

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<v Speaker 1>technology and make it more powerful before fixing the pieces

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<v Speaker 1>and parts that are broken and then benefiting from large

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<v Speaker 1>language models generative AI and and all that AI offers.

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<v Speaker 3>What what what Project.

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<v Speaker 1>Liberty is against centralized generative AI. We're all for decentralized

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<v Speaker 1>generative AI, meaning.

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<v Speaker 3>A new better Internet.

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<v Speaker 2>Frank chairman of McCord Global. This is Bloomberg