From: allin
The discussion around the future of TikTok in the United States intensified following a series of executive orders (EOs) by President Trump, which included a temporary suspension of a prior TikTok ban and new proposals for its ownership [00:32:29]. The debate spans national security concerns, economic implications, and the platform’s broader societal impact.
Background on TikTok’s US Operations
TikTok’s grace period for a TikTok Ban was extended by 75 days by President Trump, indicating a desire to reach a deal rather than an outright ban [00:32:29]. President Trump expressed an interest in the US owning 50% of TikTok, calling it a “trillion-dollar asset” [00:33:45]. He also suggested potential buyers like Elon Musk or Larry Ellison [00:33:58].
Kou Management, an early investor in TikTok’s parent company, ByteDance, notes that their initial investment was made when ByteDance was purely a Chinese company catering to the Chinese market [00:34:19]. The founder’s revolutionary idea was to ensure every piece of content uploaded would be shown to at least one user, regardless of followers, and then distributed based on engagement [00:34:31]. This “simple concept” led to TikTok’s massive growth [00:35:20].
Valuation and Business Metrics
From a business perspective, TikTok’s US operations are significantly valuable.
- Daily Active Users (DAUs): While Meta (Facebook and Instagram combined) has approximately 200 million DAUs in the US, TikTok has about 100 million DAUs in the US, roughly half [00:35:44].
- Time Spent: Despite fewer DAUs, the time spent on TikTok in the US is equivalent to the combined time spent on Facebook and Instagram [00:36:10].
- Potential Valuation: Based on Meta’s 750 billion attributed to US operations), TikTok’s US asset could be valued at around 100 billion, or even a trillion dollars as President Trump suggested [00:36:27].
Proposed Solutions and Challenges
President Trump’s proposal for the US government to own 50% of TikTok’s US operations is seen as a way for the American people to benefit from the asset’s potential upside [00:47:08]. This approach views TikTok as having “completely and entirely worthless” value without government permission to operate, thus justifying a low acquisition price for a significant stake [00:47:11]. This could set a precedent for the US government to take a share of upside in other ventures where it provides significant economic incentives or concessions [00:49:01].
“If the United States Treasury wants to hold 50% of an asset that could be worth a 100 billion or 500 billion or you know maybe a trillion, it would make sense for the United States Treasury and the United States people to own that at effectively zero.” [00:47:33]
However, concerns exist regarding this approach:
- Picking Winners: The government taking ownership stakes in specific companies might be seen as unfairly disadvantaging competitors (e.g., Meta) and is generally considered a dangerous game for the government to play [00:51:48]. Traditionally, the government’s value capture mechanism is through taxes [00:52:02].
- International Precedent: Such an action could set a precedent for foreign governments to demand ownership stakes in US companies operating in their countries, citing security concerns [00:53:39]. China has already done this with Apple, demanding data control for its citizens’ iPhones in China [00:55:02].
- Chinese Government Decision: Ultimately, the Chinese government would need to agree to any sale or divestment, and they could choose to let TikTok die rather than comply with demands [00:48:08].
Regulatory and National Security Implications
The shift in global relations has made technology a matter of national security [00:42:11]. What was once just a food delivery company like Meituan could now be seen as a national security threat due to its scale and data [00:42:16]. This perspective has led to changing regulatory regimes in both the US and China, impacting investors in Chinese technology companies [00:42:41].
The US government’s stance, particularly under the Trump administration, is to embrace tech leaders and innovation as a national security imperative, unlike previous administrations that might have “picked favorites” [00:45:16].
Societal Impact
Beyond geopolitical and economic considerations, TikTok’s impact on society is also a subject of debate. The platform, like other “online products,” leverages “algorithmic targeting and personalization” to hypertune content to user preferences [01:40:21]. This can create an “addicting” experience, leading to “binge watching” and potentially contributing to a “dejected” populace that “opts out” of real-world engagement [01:40:59].
There’s a correlation (though not necessarily causation) observed between the rise of companies like Netflix and TikTok (which thrive on consuming user time) and societal trends such as increased SSRI prescriptions and declining labor participation rates [01:38:00]. This raises concerns about the “dopamine addiction” fostered by these platforms, potentially leading to increased rates of depression and disengagement [01:42:44].
“The real damage to our kids is not that the screens are damaging them, it’s that it’s replacing time… kids are substituting whether it’s TikTok or Netflix or YouTube time for time with their friends, time doing physical activities.” [01:42:11]