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The TikTok Ban Is a Disaster, Even if You Support It

The Atlantic

www.theatlantic.com › technology › archive › 2024 › 04 › tiktok-meltdown-ban-biden-china › 678177

So: You’ve decided to force a multibillion-dollar technology company with ties to China to divest from its powerful social-video app. Congratulations! Here’s what’s next: *awful gurgling noises*

Yesterday evening, the Senate passed a bill—appended to a $95 billion foreign-aid package—that would compel ByteDance, TikTok’s parent company, to sell the app within about nine months or face a ban in the United States. President Joe Biden signed the bill this morning, initiating what is likely to be a rushed, chaotic, technologically and logistically complex legal process that is likely to please almost no one.

The government’s case against TikTok is vague. Broadly speaking, the concern from lawmakers —offered without definitive proof of any actual malfeasance—is that the Chinese government can use TikTok, an extremely popular broadcast and consumption platform for millions of Americans, to quietly and algorithmically promote propaganda, potentially meddling in our nation’s politics. According to the U.S. State Department, the Chinese government is set on using its influence to “reshape the global information environment” and has long manipulated information, intimidated critics, and used state-run media to try and bolster the Chinese Communist Party’s reputation abroad. Lawmakers have also cited privacy concerns, suggesting that TikTok could turn American user data over to the CCP—again without definitive proof that this has ever occurred.

This week, Senator Mark Warner told reporters that, although many young Americans are skeptical of the case against the app, “at the end of the day, they’ve not seen what Congress has seen.” But until the American public is let in on the supposed revelations included in these classified briefings, the case against TikTok will feel like it is based on little more than the vague idea that China shouldn’t own any information distribution tool that Americans use regularly. Some of the evidence may also be of dubious provenance—as Wired reported recently, a TikTok whistleblower who claims to have spoken with numerous politicians about a potential ban may have overstated his role at the company and offered numerous improbable claims about its inner workings.

TikTok, for its part, has argued that it has made good-faith efforts to comply with U.S. law. In 2022, it spent $1.5 billion on data security initiatives, including partnering with Oracle to move American user data Stateside. Under the partnership, Oracle is in charge of auditing TikTok data for compliance. But, as Forbes reported last year, some user data from American TikTok creators and businesses, including Social Security numbers, appear to have been stored on Chinese servers. Such reports are legitimately alarming but with further context might also be moot; although the ability to do so has recently been limited, for a long time, China (or anyone else for that matter) could purchase  such personal information from data brokers. (In fact, China has reportedly accessed such data in the past—from American-owned companies such as Twitter and Facebook.)

[Read: It’s just an app]

The nuances of the government’s concerns matter, because TikTok is probably going to challenge this law based on the notion that forcing a sale or banning the app is a violation of the company’s First Amendment rights. The government will likely argue that, under Chinese ownership, the app presents a clear and present national-security threat and hope that the phrase acts as a cheat code to compel the courts without further evidence.

Nobody knows what is going to happen, and part of the reason why is because the entire process has been rushed—passed under the cover of a separate and far more pressing bill that includes humanitarian aid to Gaza, weapons aid for Israel, and money to assist the Ukrainian war effort. This tactic is common among legislators, but in this case, the TikTok bill’s hurried passage masks any attempts to game out the logistics of a TikTok ban or divestiture.

Setting aside the possibility that the courts declare the law unconstitutional, here are just a few of the glaring logistical issues facing the legislation: First, recommendation algorithms—in TikTok’s case, the code that determines what individual users see on the app and the boogeyman at the center of this particular congressional moral panic—are part of China’s export control list. The country must approve the sale of that technology, and as one expert told NPR recently, the Chinese government has said unequivocally that it will not do so. TikTok’s potential buyer may, in essence, be purchasing a brand, a user base, and a user interface, without its most precious proprietary ingredient.

This might make for a tough sell, which raises the second issue: Who is going to buy TikTok? At the heart of the government’s case against the app lies a contradiction. The logic is that TikTok is the beating heart of a social-media industrial complex that mines our data and uses them to manipulate our behavior and, as such, it is very bad for an authoritarian country to have access to these tools. Left unsaid, though, is why, if the government believes this is true, should anyone have access to these tools? If we’re to grant the lawmakers’ claim  that TikTok is a powerful enough tool to influence the outcomes of American elections, surely the process of choosing a buyer would have to be rigorous and complicated. One analysis of TikTok’s U.S. market values the app at $100 billion—a sum that rather quickly narrows down the field of buyers.

Tech giants such as Meta or Microsoft come to mind, which, if approved, would amount to a massive consolidation in the social-media space, giving these companies greater control over how Americans distribute and consume information (a responsibility that Meta, at least, would rather not deal with, especially when it comes to political news; it has overtly deprioritized the sharing of news in Threads, its X competitor). Bids from Oracle and Walmart have been floated in the past—both of which would amount to selling a ton of user data to already powerful companies. That leaves private-equity funds and pooled purchases from interested American investors, such as Steve Mnuchin (who, as Treasury secretary during the Trump administration, was vocally in favor of a TikTok ban) and a handful of billionaires.

[Read: The moneyball theory of presidential social media]

But as we’ve seen from Elon Musk’s purchase of Twitter, putting the fate of a social-media platform into the hands of a few highly motivated individuals can quickly turn into a nightmare. A Muskian ideological purchase would mean a set of owners manipulating the app as part of an extended political project, perhaps even one that works against the interests of the United States—almost exactly what lawmakers fear China might be doing. There is, too, the ironic possibility that any outside investors with enough money to purchase the app might themselves have ties to China, as Musk himself does through Tesla. In this scenario, a sale might end up merely providing the CCP with a helpful veneer of plausible deniability.

There is also the Trump factor. The law gives the sitting president broad authority to judge a worthy buyer, and it gives ByteDance 270 days to find a suitor—a period that the president can extend by 90 days. Close observers might note that there are 194 days until the next election and some 270 days until the next president is sworn into office. It stands to reason that Biden’s qualified buyer might be different from one selected by Donald Trump, who has his own media conglomerate and social app, Truth Social, and is famous for self-dealing.

Trump, for his part, has reversed his opinion on TikTok’s sale (he had previously been in favor, but now opposes it), reportedly after pressure from one of his China-friendly mega donors. If elected, Trump could plausibly attempt a reversal of policy or simply turn around and approve the sale of TikTok to a group with close ties to China. Or, of course, the courts could strike all of this down. Regardless of who is president at the time, this is a lot of authority to grant to one partisan authority. You can play this 37-dimensional game of mergers and acquisitions chess all day long, but, ultimately, nobody knows what’s going on. It’s chaos!

Process matters. If you’re of the mind that TikTok is a pressing national-security threat, you’d be well within your rights to be frustrated by the way this bill has been shoehorned into law. It happened so quickly that the government might not be able to adequately prove its national-security case and might miss this opportunity. And if you, like me, believe that TikTok is bad in the ways all algorithmic social media is bad, but not uniquely bad—that is, if you believe that the harms presented by social media are complex and cannot be reduced to an Axis of Evil designation—you might very well be furious that the first major legislation against a big tech company is, at this point, little more than vibes-based fearmongering. The case for TikTok is debatable, but the path the government has taken to determine its fate is unquestionably sloppy and short-sighted.

Senate launches probe into high Ozempic and Wegovy prices in the US

Quartz

qz.com › senate-probe-ozempic-bernie-sanders-1851433652

U.S. Sen. Bernie Sanders sent letter on Wednesday to Novo Nordisk CEO Lars Fruergaard Jørgensen announcing that the Senate Committee on Health, Education, Labor, and Pensions, which Sanders chairs, has launched an investigation into the high prices the company charges for its blockbuster diabetes and weight loss dugs.

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Elon Musk’s EV Empire Is Crumbling

The Atlantic

www.theatlantic.com › technology › archive › 2024 › 04 › tesla-cars-batteries-power-company › 678168

Of late, Tesla’s cars have come to seem a bit hazardous. Their self-driving features have been linked to hundreds of accidents and more than a dozen deaths. Then, earlier this month, the company recalled its entire fleet of Cybertrucks. A mechanical problem that trapped its gas pedal, as InsideEVs put it, “could potentially turn the stainless steel trapezoid into a 6,800-pound land missile.”

Along the way, Tesla—which did not respond to multiple requests for comment—has defended its cars and autopilot software. As of last week, the company told federal regulators that the Cybertruck malfunction had not been linked to any accidents or injuries. But even resolving every safety concern may not stop Tesla’s entire EV business from becoming a hazard. Yesterday afternoon, the world’s most valuable car company released its earnings report for the first quarter of 2024, announcing that its net income had dropped 55 percent from a year ago. On an investor call shortly after, Elon Musk could offer only a vague euphemism to describe what has become an especially disastrous month: His car juggernaut “navigated several unforeseen challenges.” Just in April, Tesla has announced its first drop in sales since 2020, recalled one line of vehicles and reportedly canceled plans for another, and begun mass layoffs. There are still, somehow, six days left for the month to get worse.

Whether Musk can sustain his EV empire is now in doubt. He told investors that Tesla’s primary focus is now on AI and self-driving cars. But even if that pivot fails, the company has positioned itself to be on the edge of another, perhaps more crucial part of the green transition: delivering and storing America’s power. Tesla’s EV chargers are ascendant, if not dominant, as are its huge batteries that store renewable energy for homes and even entire neighborhoods. Profits from Tesla’s energy business were up 140 percent compared with the same period last year, and Musk asserted yesterday that the division will continue to grow “significantly faster than the car business.” The company’s future may not lie in following the footsteps of Ford, then, so much as those of Duke Energy and Con Edison. Tesla, in other words, is transforming into a utility.

Tesla’s core problem has been that its cars are falling behind the curve. Even with sagging sales, the company remains America’s biggest EV manufacturer, and its car sales still far outweigh the revenue it gets from energy storage. But Tesla’s models, once undeniably high-tech and cool, are aging.

The Cybertruck debuted in November, but Tesla has sold only about 4,000 of them, fewer than the number of F-Series trucks that Ford sells on average in two days. Otherwise, Tesla hasn’t released an entirely new passenger model in more than four years. Its competitors have used the time to catch up. The Chinese brand BYD is pumping out dirt-cheap, stylish cars and recently surpassed Tesla as the world’s leading seller of EVs. BYD’s cars aren’t available in the U.S., but automakers such as Rivian, Hyundai, and Ford are selling high-tech electric cars. Americans now want affordable EV models, not just high-tech ones—and even Tesla’s push to incrementally cut sticker prices hasn’t achieved that. In yet another April debacle, Reuters reported that the company had scrapped a long-anticipated, more affordable model that would have sold for just $25,000. Musk did tell investors yesterday that the company is speeding up the timeline for more affordable vehicles built “on the same manufacturing lines as our current vehicle lineup.” But he did not specify prices and declined to answer a direct question about whether the cheaper cars will be entirely new models or tweaks to existing ones.

[Read: America is missing out on the best electric cars]

The company still has one big advantage in the EV game. No matter their manufacturer, nearly all future EVs in America will rely on Tesla. Just as gas stations were necessary to make the highway system usable, electric charging stations are a key hurdle to wider EV adoption. Tesla’s Superchargers are much faster and more reliable than those of many of their competitors, which is why most major auto manufacturers have declared that they will adopt Tesla’s proprietary charging port in future vehicles. The number of Supercharger stations across the country has increased steadily for years, and is expected to take off this decade.

In a few years’ time, those Tesla Superchargers might all also draw power from Tesla’s batteries, which are the little-known core of the company’s transformation into a power provider. As America continues to pivot to clean energy, storage will become crucial: Solar and wind are and will continue to be the country’s fastest-growing renewables, but the energy grid can’t just turn off at night, on a cloudy day, or when the breeze dies down. Just as Tesla was ahead of the EV-adoption curve more than a decade ago, it is set up to be king of the battery boom.

Since 2019, the company has been selling “Megapacks”—huge batteries that hold enough electricity to temporarily power thousands of homes—to grid operators in New York, Massachusetts, California, Dubai, Australia, the United Kingdom, and elsewhere, as well as to private customers, including Apple. Tesla is continuing to ramp up the factory in California that manufactures these batteries, as well as building another in Shanghai. Until recently, there hasn’t been much competition, and some analysts have predicted that the Megapack business could one day be worth “substantially more” than Tesla’s cars.

[Read: Tesla’s magic has been reduced to its chargers]

Tesla also sells Powerwalls, large batteries designed for home installation. Powerwalls have made up roughly half of all home-battery installations since 2018, and demand is set to explode. The company deployed more than twice as much energy storage in 2023 as in the year prior. Tesla also has a line of solar panels, and though that business has proved fickle, it is yet another way for the company to provide the raw power that an electrified world will require. With its chargers and batteries, Tesla’s main products are becoming infrastructural, a step removed from consumers but no less essential. Vaibhav Taneja, the company’s CFO, said yesterday that energy-storage deployment should grow by at least another 75 percent this year and begin “contributing significantly to our overall profitability.”

That future, of course, is far from preordained. Tesla’s auto business remains one of the few profitable EV operations in the country; Ford and GM are losing billions of dollars on EVs as they retool their companies away from the internal-combustion engine. And, to say the least, Musk is hardly a predictable executive. Yesterday’s earnings call suggested that he is more infatuated with self-driving robotaxis than electrifying the grid: He’s doubled Tesla’s AI-training resources in three months. But self-driving cars are the opposite of a safe bet, and semiautonomous vehicles, which have become the industry standard, will no longer set Tesla apart. Clean energy is a highly competitive, capital-intensive, and rapidly changing industry. Just like its massive head start in the EV field, Tesla’s battery and charging advantages will not be self-sustaining.

But absent a far more catastrophic collapse, Tesla appears to be successfully jumping from one wave of the clean-energy revolution to another—from providing cars to providing the electricity that will power not just cars, but also homes, offices, and more or less everything else. A decade from now, even as Tesla vehicles slide in popularity, the company’s influence may prove stronger than ever.