announcer: this is bloomberg technology. with caroline hyde and ed ludlow. caroline: live from new york, caroline hyde. >> mike sheppard in washington. caroline: the supreme court upholds the law that threatens tiktok's shut down in the u.s..

trump will make a decision, the white house saying the tiktok action falls into the trump administration, according to reuters. ben bain, this is perfectly obvious. the decision expected. ultimately this cannot be distributed by the app stores or supported by oracle and others. ben: the decision specifically, the court was clear about national security interest congress laid out in passing this law, president biden signing it as being more important or the most important thing when considering whether to let this stand versus arguments from a free-speech perspective, tiktok is important from a commerce perspective, whatever percentage of the 170 million americans who use this,

they need to rely on it so essentially supreme court said national security is justified here. it falls to donald trump. back to his first term, this is a different posture he is taking. he came out in favor of taking action against tiktok, first term. now we see a different position here. we will see monday. mike: your team have been covering the tiktok legal saga for months since they filed claim in may. talk about how the reprieve might work under the law and what the justice department could do to hold back on enforcement at first? ben: effectively now that this law is on the books and will stay on the books, it falls to the executive. the president. the doj. donald trump's incoming ag to

enforce it. donald trump wants to cut this deal. friend of the court brief weeks ago he said he can cut this deal in office. i don't think we see movement in the next few hours. donald trump has made clear he wants to get this done. he thinks he can do it. he has expressed confidence to do many things. this is one thing he can get done. the next step is whether a deal gets done. the outgoing administration and the incoming have signaled they will not enforce this immediately. we will not see january 19 the biden administration take action and we are not expecting to see the trump administration do anything monday. caroline: thank you.

what could bytedance decide to do on the 19th? alex, they could decide we could not use it and the infrastructure might not be there to support it. >> tiktok is thinking about going dark. we heard references. we knew it would not go dark immediately. when apple, google and oracle stop hosting, we knew it would be a slow deterioration for people using it. we've heard reports tiktok may shut off sunday and users may see a pop-up that directs them to a website to talk about the ban. fascinating strategic move if that comes to pass. that would mobilize 170 million

americans, half the country to be angry about this, protest it and demand action from trump to do something about it. mike: those protests didn't succeed in getting the ban staved off in march and april going through congress. stand a better chance this time with the incoming administration? alex: these kinds of appeals could have more luck this time. when tiktok mobilized its dedicated base to call congress when the law was introduced to prevent them from passing it, it stoped lawmakers fears more about the potential for the app to create outrage and discord and anger americans. it drove home the point that they needed to do something. in this case, trump has campaign on the app and credits it with reaching young voters who he

thinks moved the needle for him. there will be a more willing audience for pressure. creators were livestreaming outside the supreme court last week, sending the message. trump campaign on promising he would help us with the app. now we are going to hold him to his word. mike: thank you. gene munster from deepwater asset management. talk us through what this means for the competitors to tiktok. if you are looking to trade this, it is murky. supreme court upholding the van yet donald trump saying he may bring a reprieve. what is a traitor to do? -- trader to do? gene: we are expecting this will not be upheld. despite the supreme court, the

writing is on the wall tiktok is going to remain. the big change was not about the supreme court. it largely doesn't matter. what matters is the tone of the democratic party, that speaks to strong bipartisan support in april leading to 87% in the house and senate. typically a bill gets passed at 55%. this is unprecedented bipartisan support, that is now shifting. for an investor, one piece for meta, we expect 5-10% tailwind if they capture 50-75% time spent on instagram reels. there's another lesson here for investors to go well beyond

tiktok. there is no other app in the world i could imagine that could cause this uprise. it is the power of a strong product. indicative product. the power of that product influencing political decisions. what does that mean for broader investing? companies that have that leverage, nvidia for example, it's really hard to displace. caroline: interesting considering the pressure nvidia is putting on the next set of potential laws coming its way to limit it selling abroad. this about-face of lawmakers, bipartisanship against tiktok to suddenly everyone wanting it to continue, how does that materialize? chuck schumer, minority leader of the senate saying we need a u.s. buyer. but does that mean for the

addiction of the algorithm? gene: i don't think it will be a new owner. ultimately, this will go back to her house and senate vote. i think tiktok will be allowed to remain. there is that much political pressure. biden today was evidence of how strong political pressure is. if i'm wrong and there is a sale, the algorithm doesn't change. where does that data go? i don't think that changes. mike: donald trump spoke with xi jinping today, whose blessing would be needed for any sale by bytedance. do you see buyers emerging perhaps including elon musk whose name has been floated in chinese circles? gene: if i'm wrong and this goes

the route of a sale, elon is a buyer. there could be other constituents, groups, telcos. they started to venture into things like this. mega cap has more room with the administration. something along those lines. something will come out. it's worth $100 billion. a doable ticket. tiktok users should rest easy because they will get their product, whether in current form or under new leadership. caroline: wow, $100 billion. thank you. coming up, tech ceos flocked to mar-a-lago and then the inauguration. how will policy change under the

upcoming administration? meanwhile, intel shares, we digress for tiktok for but a moment. shares rising after a report from a website called semi-accurate. that said the company will potentially be acquisition targeted. ♪

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i've got another one. >> today an oligarchy is taking shape in america of extreme influence and power that threatens our democracy, basic

rights and freedoms. caroline: president biden taking aim at what he calls a tech industrial complex. he didn't name anyone in particular. several big names in the industry have donated to donald trump and plan to attend the inauguration. one key partner of his during the campaign was elon musk. kaylee: a lot of wealth will be at the inauguration and physically on the platform with donald trump as he takes the oath of office. elon musk, the world's richest man, the second and third richest men will also be there, mark zuckerberg and jeff bezos. tim cook ceo of apple is planning to attend. one notable exception is the ceo

of nvidia, jensen huang is currently in southeast asia. noteworthy given the news today on tiktok. the ceo of tiktok will be at the inauguration. he is just attending without a prize seat on the platform. just those three individuals, elon musk, zuckerberg and bezos have a net worth of $1 trillion. mike: with donald trump taking attendance, making sure these industry allies and billionaires are there, what are they looking for from him in return? kailey: take tim cook. apple would be susceptible to problematic tariffs on things like china. there are policies they are hoping to avoid.

same goes for social companies. zuckerberg taking action at meta, reshuffling personnel and policy as they stopped fact checking. we heard from president biden, he did not name zuckerberg directly but in his warning about an american oligarchy, he specifically referenced social media companies pulling back on fact checking. this president has not been shy about targeting these companies in the past. mike: thank you. tech policy under the incoming ministration, jason oxman of the information technology industry council. we wanted to talk about trade and your concerns. this is something your group has singled out as an area of priority and concern.

biden administration put pressure on china. that has a ripple effect. jason: what we are looking for from the administration is more of a strategy that takes advantage of opportunities for u.s. companies to succeed internationally. leadership in tech is what the u.s. is known for. in the biden administration, we've had a lack of strategy and inability to match significant national security interests with economic opportunity that promotes u.s. opportunities internationally. the trump administration is focused on working in partnership to address china. the president-elect has already talked to president xi about moving forward in working together. u.s. tech leadership continues. the economic driver of u.s. economy is technology.

caroline: do we not need acts like a potential banning of a significant social app that touches 170 million users to ensure national security? that was bipartisan in nature. trump might have a conversation with xi but ultimately this was bipartisan because of national security concerns. jason: the tiktok news of the day is interesting. 170 million are watching. i don't have a prediction for monday at noon. it highlights how difficult these issues are to address. the larger question of how we address china is one that requires strategy. what the tech industry is looking forward to is trump seems to have more focus on making this strategic rather than one-off.

earlier this week the biden administration adopted rules around ai diffusion that restrict the ability of u.s. companies to export ai technology including to allied countries around the world. that's a mistake. it was not done in consultation with industry. we think the trump administration will do better with that issue. that's the need of balance, making sure u.s. leadership is not harmed by skewing too far in one direction. caroline: jensen huang of nvidia maybe feels similarly, nvidia pushing back against the latest announcement. interesting, perhaps jd vance supported some views from lina khan about the strength and overall domination of certain players in tech. listen to what lina khan said about the bipartisan nature of that. lina: there is strong bipartisan

concern about the economic power of large tech companies and how that can undermine fair competition, free speech rights. we will see what the next administration does but it has been an area of strong bipartisan concern during my tenure. caroline: the ftc chair has support from vice president elect. will you see enthusiasm around future m&a in tech? jason: lina khan has 72 hours left on the job. her replacement has taken a more balanced approach, more favorable to advancing u.s. innovation. the president is a tech innovator, surrounding himself with innovators coming into office, people serving in crucial roles that understand the vital role the u.s. tech industry plays in economic growth. as far as trade and export

around tech, we run a $300 billion surplus in the u.s. on digital trade, exports of u.s. tech around the world. as long as we can place regulators as the president-elect is looking to do who are willing to listen to industry and make sure balance is struck between national security and economic growth, we will be in a better place for the next four years. caroline: thanks for your time. coming up, more on tiktok. the decision on the supreme court. ♪

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from the supreme court today, standing by the law. the latest from trump saying the tiktok decision will come in the not-too-distant future from him saying he needs time to review the situation. he's been promising to solve it. mandeep singh joins us. if i'm oracle, apple or google what do i do in this situation on the 19th? mandeep: given the liabilities of keeping the app, you are going to shut it down. the app will go down. the question is what will president trump do day one? the tech executives at his inauguration will find a way to migrate tiktok data to competing platforms, youtube or meta. everyone is scared.

they will lose their business because their followers and content will go away. if you migrate that data to youtube, you can potentially keep your business running, so the data aspect is huge. far too much focus has gone to the sale of the u.s. business. if you can migrate the data, aside from the algorithm, the data is huge. that's what everyone cares about when you talk to creators and consumers. migration of data would be a huge factor. mike: donald trump presents himself as the dealmaker. he would like to see this solved by finding a buyer. no easy feat. talk about the hurdles including the cost and who would pay for it and then clear national security? mandeep: there has been private

equity interest in the past. musk has been mentioned as a potential given his closeness with president trump and the chinese authorities. there are number of buyers, law mart, oracle. i can see companies being interested. you can see how sticky it is. millions using it clearly want the platform to stay. given the stickiness, finding a potential buyer is the most likely option. president trump will go with. same time, the data migration is huge. that will solve half the problem. caroline: a lot of this takes bytedance and china's sign off. the investors in bytedance that

might benefit, coming up, sarah oh lam. ♪

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caroline: welcome back to "bloomberg technology." i am caroline hyde in new york. mike: i am my shepherd in washington. caroline: we look at the supreme court decision on tiktok. the law stands, it has to be banned or divested. it does not have much of an effect on competitors. meta's platform is up, alphabet up. snap had been one of the most volatile stocks. everyone waiting with bated

breath with what lawmakers do and what trump does. he takes to true social to see a decision is imminent. let's get more from bloomberg's kurt wagner. kurt: there is so much that will happen over the next 72 hours. the supreme court did uphold the law but this is what we expected. the ball is in donald trump's court. the ban should kick in sunday. everyone expects an executive order when he takes office, maybe give tiktok more time to find a buyer. tiktok since they do not want a buyer. there are many unique elements to this thing. it would be premature to say anyone knows what will happen. this is one thing that is at least off the table. the idea of the supreme court could save tiktok and we can focus on the other options which

mostly centered around donald trump. mike: those options on donald trump really do center as we were just discussing on finding a buyer. we found one, frank mccourt, the billionaire behind the project liberty proposal. do they have the energy and wherewithal to pull that off? his partner was at mar-a-lago to talk to trump. kurt: we spoke with frank mccourt in our bloomberg offices and he was very optimistic they could get a deal done. the question is does bytedance want to play ball? everyone on the u.s. government side of the fence once a deal done to keep tiktok around. president trump wants to get a deal done. will bytedance and the chinese government say yes, we are willing to sell to a frank mccourt or someone else? that is a larger hurdle that

needs to happen. i do not think it is for a lack of energy or interest on the frank mccourt side. does bytedance see frank mccourt as a acquirer of this asset? mike: let's bring in sarah oh lam. a senior fellow at the technology policy institute in washington. what do we take in term of the long term from this decision? what kind of a lasting impact on jurisprudence with respect to tech and content can we take from it? sarah: it was interesting reading the opinion that came out at 10:00 a.m. it is for the court with two occurring opinions attached. they decided the case on the merits, on the first amendment question. they found that the ban survives intermediate scrutiny, it is

constitutional and there are content neutral reasons for moderating tiktok. is it a first amendment question? they say yes. they go through the first amendment analysis, finding the law was content neutral. it was justified by a content neutral rationale. tiktok brought a claim but under intermediate scrutiny the law is valid. this decision will be part of the first amendment jurisprudence. justice gorsuch even said he feels uncomfortable that the court is making such a big decision based on a handful of days of deliberation but it is narrow enough that they issued a per curiam opinion and they are all in agreement. caroline: they are in agreement that national security was the key and that ultimately first amendment rights days if you can

find a different buyer. it is mainly the issue of who owns the parent company and how close bytedance is to china. how do you alleviate the national security issue? what it have to be a u.s. buyer? sarah: that is a really good observation. nothing else has changed so congress made a determination. the president five years ago even raise the question about china being a for an adversary and having impact on the algorithms. even the prediction markets are looking at will the ban be in play in may 2025? how much can change? will there be changes in their systems and ownership structure? that is all still to be determined but the concerns are still there. there was strikingly bipartisan support from congress. no legislator disputed the national security risks.

caroline: now they are changing their mind. there seems to be a complete about-face. everyone wants to ensure that on the 19th, poof, we don't lose tiktok. lemonade is owned by bytedance. we are seeingr -- we are seeing rednote become a key focus. sarah: isn't it ironic? it is a political popular culture moment where american policymakers have to make the case to american young people that social media apps that are made here in the u.s. are preferable but really they are competing on stickiness. the apps are sticky. tiktok is fun to be on. there are implications for american policymakers to be more sympathetic to american companies building social media apps.

mike: how does this fit into the broader game between washington and beijing when it comes to trade and technology policy? does this become, if the sale goes through, does this become a point of leverage for xi jinping in his dealings with donald trump? sarah: tiktok and the sticky apps are definitely a feather in their cap. china is good at making these apps. it would be surprising if they let bytedance divest. if i were them, that is a strong point of leverage. but president trump is good at negotiating a deal. there are private buyers, as well. what could happen is they could buy the tiktok brand and rebuild the whole infrastructure. it would be a different app but it would still have, presumably, the same social graph that tiktok has but not the source code that makes it so sticky.

it raises a question of, where are the american competitors? caroline mentioned snap earlier. snapchat, threads, why are these apps not getting all the traffic that might come off of tiktok? it is a good moment for americans to think about, why don't we have a tiktok that is homegrown? can we have one that is better built? let's keep americans happy on american apps. that is a presumption that all the scrutiny of social media companies has maybe lost. there is a balance between regulating and warning of dangers, but there is also this competition going on. it is an interesting moment. caroline: we have a new competitor joining the network later. sarah oh lam. senior fellow at the tech policy institute. thank you. .

spacex and blue origin facing setbacks. more on that, next. this is "bloomberg technology." ♪

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caroline: this is "bloomberg technology." you are looking at a live shot of the principal room. find the podcast online on apple, spotify and iheart. this is bloomberg. >> oh, my god! >> what is this? caroline: footage taken of spacex's rocket exploding into the sky minutes into its seventh a test flight. this did not were elon musk, who said this is barely a bump in the road. they did make that extraordinary

catch of the super heavy booster. steps are being made. lauren: the weird part of this entire test launch as they achieved the secondary objective, to make the catch. the actual main objective of the flight, to test out the starship in space got cut quite short, which is unexpected given the steady progress they had been making over the last couple of years. mike: we did not see too much gnashing of teeth from spacex or elon musk. he called it a bump in the road. talk about the approach toward things like this. when things do not go their way, do they just go back to the drawing board? loren: absolutely. this is about spacex's culture and how they like to test. they like to fly frequently.

they learn from the moments and they go back and change and make updates and lie again quickly. they are an outlier when it comes to the space industry. other companies, even nasa are a bit risk-averse. for them it is a learning experience. it is definitely unexpected given the steady progress they have been making. this was their shortest test flight. we were not anticipating an explosion. caroline: blue origin making steps forward? loren: speaking of -- it has been a wild week on the beat for us space reporters, have mercy on us. caroline: [laughter] loren: blue origin -- launched

for the first time on the debut flight. it did achieve orbit on its first launch attempt, which is an amazing accomplishment for the company. they did try to land the rocket after the flight. unfortunately it did miss the landing on the barge it was targeting. the fact it made orbit on its first attempt is definitely something blue origin should celebrate. mike: bloomberg's loren grush, thank you. turning to defense tech, geopolitical and isolationist risks price. here is what palmer lucky told us about a potential conflict with china when he announced a new plant in ohio. palmer: the fact we are predicted to run out of munitions in the first eight days of a potential conflict with china --

e wasd ohio the only state they could: guarantee the timeline? palmer: they were the best state of giving us a chance to hit the timeline. mike: bloomberg's lizette chapman joins us now. you have done some great reporting trying to find names to watch. tell us more about how big the universe of defense tech companies is the lizette: loren mentioned the granddaddy of the mall, spacex. it has proven companies can and will secure these big contracts. its market cap is twice that of lockheed martin. palantir also has a market cap that is bigger than lockheed martin and raytheon.

we have a bunch of startups and it is down to 10 on the list that focus on things that will have an impact on war. one company specializes in hypersonics. the ability to travel five times the speed of sound. we have a company that specializes in high-powered microwaves that can shoot drones out of the sky, 100 or more. we have other ones on the list that are spending a lot of different areas that are redefining warfare. what is interesting about the list, all of these have been started in the past 6, 7, 8 years. these companies are at the sides were a palantir or spacex were at a decade ago. these are the up and comers. the timing and route to maturity is something to watch. caroline: now worth $14 billion. scale ai, all about ai, the data

behind warfare, is worth $13.8 billion. can you tell us about where there is a home for defense tech or is it sprawling? lizette: you nailed it. it is very much sprawling. with ed's conversation with palmer, asking why not build in california? was that ever on the list? palmer said there was a 0% chance. they are not the only ones looking at the high cost of living, energy, some regulatory issues, etc., that are driving other companies to operate in other areas. one is in atlanta. you have rebuild in massachusetts. they are diverse. there are new hubs developing.

one is in colorado. it is diverse and they are looking to create a number of new tech hubs focused on defense. caroline: there is plenty more out there that you continue to report on. coming up, we will be joined by the social fly ceo. we will be talking about what creators are doing to prepare for the possible going dark of tiktok on sunday. this is "bloomberg technology." ♪ am i just gonna take what the markets gives me? no. i can do some research. ya know, that's backed by j.p. morgan's leading strategists like us. when you want to invest with more confidence... the answer is j.p. morgan wealth management

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caroline: turning back to tiktok. one of the groups most affected by the potential ban is creators. courtney spritzer, ceo of socialfly. developing strategic partnerships with certain influencers. what is the reaction to potentially going dark on sunday? courtney: there is a lot of anxiety around this. there are tons of creators who rely on tiktok for partnerships with brands, for affiliate marketing, selling their own merchandise on tiktok shop. a lot of creators are on the edge of their seat, waiting to see what will happen on sunday. they are also making a lot of preparations for what they will do if there is a ban.

caroline: diversifying, pointing users to new forms of social media, and all the others like reels on instagram. advertisers, marketers, what do they do? they have spent money to put their brand on their -- brand on this platform. what is there risk analysis? courtney: all marketers and advertisers are planning for what will happen after sunday. essentially what will happen is they may shift the advertising dollars to other platforms. a lot of people are taking a wait and see approach. the news keeps changing day over day. we are really going to have to see what happens on sunday. we are talking to all of our clients and making preparations. caroline: we are seeing how potentially instagram based

spending boosted the most. facebook does well, youtube. i'm interested about some of these chinese competitors we are hearing of. rednote, lemonade is owned by bytedance. any marketers looking to spend there? courtney: it is possible. as marketers we are looking to see all of the channels that are available and where audiences are spending time. we are definitely considering it. those platforms, too, will likely face the same challenges we are facing with tiktok. everyone is being very cautious, making backup plans. we are having constant conversations with our clients so we are keeping them up-to-date, minute by minute, on what is going on. caroline: france have seen tiktok in a different light. the way you can become a trend overnight without planning to or starting to plan to. company such as your own.

how will they never get changing nature of trending and ensuring brands get to the right people at the right time? courtney: that is the nature of the business we are in. these social media platforms are constantly evolving. we always advised creators and influencers to not put all of their eggs in one basket and to rely on certain social media platforms for their incomes. what a lot of creators are doing outside signing petitions to make sure tiktok stays intact is diversifying and going to other social media networks. they are building up their own owned platforms, making their own websites, building their email lists so they can reach their followers outside of specific platforms, which is really important, to always have a diversified approach,

especially when it comes to relying on platforms that you do not own. caroline: is that the lesson here? look, they are always shifting and we are always finding the latest, greatest thing. courtney: yes, that is the major lesson. the reality is if you are building your business or your following on a specific platform that you do not personally own, you will always have this risk. we see this happen a lot. sometimes these platforms face outages and you do not have access to posts at certain times. it is important to own your audience and you can do that by collecting emails, diversifying your channel base and figuring out ways to reach your customers and your audiences on other platforms. caroline: socialfly ceo courtney spritzer, a busy day for you. that does it for this edition of "bloomberg technology." do not

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