Bloomberg Technology: TikTok Latest, Tech Deals
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From the heart of where innovation, money, and power collide. In Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. ♪♪

Live from New York, this is Bloomberg Technology. We are getting straight to our top story. Out of Washington, TikTok is at the U.S. Supreme Court fighting for its future. Justices are hearing arguments only nine days before a federal law is set to ban TikTok in the United States. If it isn't, sold by its Chinese parent company. Bloomberg's Tyler Kendall standing by at the court. And remind us, Tyler, the key questions for the court. Is it national security versus free speech here?

Yeah. Hey, Caroline, oral arguments here at the Supreme Court now just reaching about their one hour mark. Lawyers for TikTok started their opening arguments by saying that this is a First Amendment issue, arguing that if that ban does go into place, it could potentially curtail the freedom of expression of its more than 170 million U.S. based users. The lawyer for TikTok arguing today, Noel Francisco, also added that.

that the timeline for the ban is unrealistic and quote very difficult asking the court at the very least to delay the ban going into place. Now on the other side of this is what you mentioned the national security concerns in a brief submitted to the Supreme Court today ahead of today's arguments the U.S. federal government says this is not about freedom of speech since there is still a viable path on the table for TikTok to operate if they divest.

they're not trying to restrict freedom of speech. They're trying to restrict what they call foreign adversary holding, considering ByteDance's connections to China and what that could mean to national security. Now, that appears to be the thread that we're seeing the Supreme Court justices pull on here, potentially expressing some skepticism when it comes to TikTok's arguments. For example, Caroline, the first question out of the gate from Justice Clarence Thomas was whether or not TikTok was trying to convert

a potential restriction on ByteDance's ownership of TikTok into a restriction onto the freedom of speech of TikTok and its users.

Tyler Kendall, we thank you so much. And look, just reading the tea leaves here, shares of Snap, Meta on the higher side. It doesn't seem as though thus far the arguments are going in TikTok's favor, as has been on our Tea Live blog on the Bloomberg. Frank McCourt is with us to keep the conversation going. Executive Chairman of McCourt Global and founder of Project Liberty, which just made a formal offer to acquire TikTok. You call it the people's bid.

Why is Project Liberty and your consortium the right owners if indeed ByteDance says it will divest? Yeah, hi Carolyn, how are you? Good, I'm good. Good. I think we're the right buyers because we have put all the pieces together. We have the funding. We've worked through all the legal issues. We've put a formal offer, as you point out, right in front of ByteDance so they have something now to react to. And most importantly, we have the

the clean American tech stack to move the user base over to, and we don't need or want the Chinese algorithm. And so I think that the algorithm is something that China is very, very beholden to and has said clearly that they're not going to be selling it. We don't need it or want it, as I point out. So I think we're a particularly unique bidder and well-positioned. And I think, as a matter of fact, we have a leading bidder right now. We

We were just seeing some of the share price reactions of rivals out there. From your reading into what's happening in Washington right now, does it look to be going in the favor you'd want to see? Because would you actually like a delay to proceedings to be able to go forward with a bit? Well, we'd like to buy U.S. TikTok. That's what we'd like to see as an end result and move the user base over to this clean American stack.

And I think that it's no surprise that the argument is going well for the government, because this is a real national security issue, a strongly bipartisan piece of legislation that was passed by Congress, upheld by the appellate court. So I think the conventional wisdom is that the government's position will be upheld, the legislation will stay in effect, which means on January 19th, ByteDance has to decide, are they going to shut it down,

or sell, and in order to sell they need to enter into an agreement, which is why we put a formal offer in front of them in the last 24 hours. - What is the price tag of that formal offer? - So what we've said to ByteDance is we're not gonna be talking about terms of the deal,

until we get into a formal conversation with them. And we want to be very, very respectful of ByteDance because it's a very sensitive time here. We know they're arguing in front of the Supreme Court. We've given them space to do that. And at the point in time when we engage in an active negotiation, we'll be happy to share details once we sort things with them.

Have you spoken to any of the current investors in ByteDance who are United States-based? General Atlantic, Susquehanna. We also know that Sequoia is involved, KKR. There's a lot of them. Yeah, there are. And I believe we've spoken to all of them. And they've indicated an interest in rolling over their investment. Why not? I mean, they don't want to lose their entire investment in U.S. TikTok. We've put a real proposal forward which gives them value for U.S. TikTok.

Having said that, they too are waiting to see what ByteDance decides to do before committing. I'm really interested in the fact that investors are interested in rolling over. What value will you accrete for the business going forward? Because you want, as you've articulated, a totally different tech stack. How will that change the use of TikTok? How will you monetize it as well? Because you want a different form of social media. You don't want us as content creators

for the ultimate users and being advertised against? Yeah, well, there'll be advertising on the new TikTok, let's call it TikTok 2.0. But we see an intranet evolving where rather than an attention economy, meaning algorithms designed to keep us addicted and online in a very unhealthy fashion, why not an intention economy where we just...

let people know we're interested in buying something or reading something or information on something and then we get that from the business or the advertiser. And, you know, inference is much less valuable than intention. So rather than have algorithms that surveil us, scrape our data, and then guess that we might want something, why not you and I

and just be very clear, verify that we're a human being and be very clear about what we want and then receive it on the internet. We have technology available now that didn't exist 25 years ago that enables you and I to actually control our identity,

our data and our relationships. So let's put people in charge of their data. Our data is very valuable as it turns out. I mean, and that's why so much value has been accrued on a private market basis, at least to ByteDance and to TikTok. But ultimately, by not making these things quote unquote addictive, do you lose some of that value? And is that the right compromise here? Well,

There are other factors here, right? In the case of this Supreme Court hearing and the legislation that's being discussed, there are national security risks. There's also issues around safety to children. There are issues about a viability of our democratic system with such polarization. So the algorithms may be powerful. That doesn't mean...

that they're good or constructive. We just have an internet technology that's evolved into one that's attention-based, which means these platforms scrape our data, they aggregate it, and to do that, they're actually surveilling us, right? And then they profile us. And this is the problem with what's going on with TikTok, because it's not only the surveillance and the information on 170 million people, it's that

ByteDance can then provide what they want to feed to the 170 million people. So it's an influence device as well. So I think we're all learning together that the current architecture, which takes advantage of people, is not the best architecture. It's leading to some very poor outcomes.

This is just engineering. It's just it can be designed differently to work differently. We can get all the benefits we get from Internet technology without the harms. And it's interesting that this TikTok problem could actually be the way forward to a much bigger solution to having an Internet that's much healthier for all of us. How has...

that got ramifications on Meta, on Snap, which on the day are doing well because people feel, "Okay, if TikTok loses this argument, it's out." And then the viewers, the followers, the users just go to these other rival platforms. The money, the advertising money goes to these rival platforms. Why are analysts like Morgan Stanley that have pointed this out not saying, "There's a legitimate bid here and we think this could be a whole new dawn future for social media"? Why aren't people not taking that seriously? I think they'll begin to now.

I think that ByteDance has been playing out their legal strategy and it's coming to an end. Has it been a good legal strategy from your perspective? Sorry? Has it been a good legal strategy from your perspective? From the vantage point of looking at the legislation and how it was passed, strong bipartisan legislation, and the real national security risks, I think that the ByteDance...

pursuit of a legal strategy was an uphill battle from the very beginning. And I think, as I say, it's coming to an end. Now,

that that path is closing down on them, now they're confronted with January 19th. So we're talking about nine days and something has to give. So either it's going to be shut down or there'll be a transaction. That's why we put a formal offer in place so there's enough time for them to process that. And we hope they do because we want to see TikTok stay alive. We want to see it lit up. We don't want to see it

banned or shut down, just like President-elect Trump does not. Can you talk about President-elect Trump and ultimately what January the 20th means for all of this and the request he's made of the Supreme Court to just delay facts? Well, I think the legislation will operate. It will be the legislation. And it's a hard and fast date of January 19th. So the timing here is very interesting, isn't it? President Biden will still be president. It doesn't get to President-elect Trump

unless the 90-day, the three-month extension kicks in. So it's a Biden administration decision to extend the timeframe for ByteDance and TikTok. Or the Supreme Court to allow some sort of delay, which many don't think will happen. Yeah, I'm assuming in answering your question that that won't happen. If it does, it's a different ballgame. I understand that. But when you step back and think about this, why wouldn't ByteDance...

accept an offer if it doesn't include the algorithm. They win. President Trump wins because it's not banned. The shareholders that you mentioned win. They get value as opposed to getting nothing for US TikTok. US citizens win because our clean stack will protect them. The national security risk is gone. And of course, TikTok users win because the app stays in business. Why aren't there competing bids?

The legislation requires that you have a clean stack, that this be independent of ByteDance's technology. That's not an easy thing to do. If we hadn't been working on the technology and invested a half a billion dollars over the last five years, we wouldn't be in a position to bid. It's very serendipitous in a way.

that the work that Project Liberty has been doing to reimagine how the internet works just so happens to be right place, right time to actually be the winning bidder for TikTok, keep the app going, move the user base to a clean stack, and at the same time,

demonstrate to people that there's another version of the internet where they're in charge of themselves. They own their data. They own their relationships. They can get value for it. They can parse out and permission its use as opposed to being surveilled and having the data be in the hands of someone else who's deciding what to feed them.

What to tell them. Briefly, next steps for you. You've kindly given us your time today. But what happens after we start the arguments finish at the Supreme Court? I think we're all anxiously awaiting the Supreme Court to make their decision. And then we'll look forward to a conversation with ByteDance and see if we can get something completed prior to the 19th so that the Biden administration can grant the three-month extension.

Please come back if that conversation happens. Frank McCourt, executive chairman of McCourt Global, founder of Project Liberty, and the beard on the table for U.S. TikTok. Coming up, we'll take a look at some of the tech themes dominating the deals sector in 2025. Maybe this is a deal we need to talk about. Potentially a purchase of U.S. TikTok with Barack Rabid. He's of EY Americas. That's next. This is Bloomberg Technology.

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A quick check on the markets. Look, broader benchmarks are down today because the jobs numbers were so hot. Once again, we question whether the rate cuts will come from the Federal Reserve or off by 2% on the NASDAQ. But we want to shine a light on the key story. In the Supreme Court today, TikTok fighting for its future. Meta platforms higher by 0.5%. Snap up 7.7%. This as investors tried to discern that actually some of the oral arguments thus far don't seem to be going in TikTok's favor. Let's just dwell on TikTok a little bit more because...

Could it be a deal to watch for 2025? As we hear those oral arguments over in the Supreme Court, as we discern the future of TikTok in the United States, couldn't tech deals continue to be really impressive as they were in 2024? Remember, US volumes were up 32%. Barak Ravid is the man to ask, EY America's strategy and transactions technology sector leader. Joining us now, Barak Ravid.

I know you can't tell us about the intricacies of whether or not we actually get a deal out of US TikTok, but have you been thinking through that particular deal? Is the deal outlook for tech a strong one?

Yeah, Caroline, thank you for having me. Appreciate it. The outlook is actually very strong and we feel generally pretty bullish. I think on, you know, you're obviously you're talking about TikTok today and it's capturing a lot of the imagination. But, you know, when we think about this deal, obviously we can't talk about it specifically. But if you think about any large transaction, obviously it gets very complex.

And this is the kind of stuff that generally tends to move the market and tends to show that other M&A is possible and really can help ignite the market if it was to happen. But I do think that, you know, if we were to go through this, when we talk to our clients about complicated and complex carve-outs,

Typically, we talk about months and quarters in terms of timelines to getting it done, generally not days or weeks. And so to the extent that some of that work has been going on, that's fantastic. It depends on who the buyer is in terms of what the stack actually looks like and how capable they are to receive it. All of that will drive the timeline here no matter what happens. And obviously, you need willing buyers and sellers.

Ultimately, this is a geopolitical discussion that drives the potential sale of TikTok. How much is geopolitics going to play into M&A, into carve-outs, as perhaps relationships between the U.S. and China become ever more tense?

Yeah, that's a great question, Caroline. It's impossible to underestimate the impact that it already has had and the chilling effect it has had, particularly when you think about big tech, particularly when you think about the semiconductor space. I think antitrust enforcement in the U.S., I think tariff wars or skirmishes or battles, however you define those,

between the US and China and potentially the EU and other countries, suddenly adds complexity to that. So when you think about big tech and semiconductors and social media getting caught in that crosshair, it really has a big chilling effect on M&A more broadly. Now, if you think about the market more broadly than that,

90-something percent of the market isn't really involved in that, doesn't get caught up in that. So it's only the U.S. antitrust enforcement which will matter to them. And if that kind of eases off under an incoming Trump administration, I think that's generally a nice tailwind for M&A going into 2025. And you said, of course, there need to be willing sellers and willing buyers. What's interesting is we're talking with Frank McCord, he's got other, in his combined portfolio,

consolidation of people coming forward to want to buy it, private equity, family offices. For you, who are the willing buyers? Is PE a big player here? Yeah, PE, when thinking more broadly about the market, PE definitely has a role to play. I think whether it's in this deal and more broadly, they're experts at getting deals done. They've seen all the most difficult deals. They've seen the easy deals. They've seen it all.

They add balance sheet, they add availability of capital. So they are fantastic owners to be part of any kind of bid, particularly as it gets very complex. And I think the industry has a lot of experience in looking at carve-outs. This would be effectively a carve-out.

And so looking at big carve-outs coming out of large enterprises, I think private equity has a very large role to play in that, whether it's this deal specifically or more broadly. I think in general, PE is very interested in items that get carved out of larger tech enterprises. Generally, their view is that these have been unloved a little bit. They're potentially under-managed. This isn't obviously the TikTok example we're talking about here, but this is more broadly

um and they do see it as an opportunity to create value and and drive uh drive shareholder return you can have a busy year thanks for fitting us in barack ravid of ey america just want to check in on nvidia stock right now because the company has been criticizing what we expect to be new chip export restrictions coming from the biden white house ahead of any announcement that we expect later today

NVIDIA is saying it's trying to undercut the incoming Trump administration by imposing last-minute rules. Bloomberg's Mike Shepard joins us for more. NVIDIA is selling off 3% more to do with the macro jobs data, I'm sure. But tell us a little bit about what also could be a key headwind in terms of selling their devices worldwide.

Well, this really would be a headwind. And it would come on top of other restrictions on AI chip sales in China that Nvidia is already facing from the U.S. Those were imposed about a year and a half ago by the Biden administration. And this new set of

proposed restrictions that could come in the next few days, this would add a velvet rope to the world, where the US would be controlling access to these chips. It would be capped. Your access would be capped on a company and country basis.

And the closest US allies, say Europe, the UK, Japan, Australia, they would have the most and easiest access. Most of the rest of the world would face tougher restrictions. They would have to meet security requirements and also human rights requirements as well.

And then there are a handful of U.S. adversaries, namely China and Russia, that would face the most restrictions and the least likelihood of having access to this sophisticated AI technology that is coming from the U.S. and principally from NVIDIA. Mike, what is so fascinating is it hasn't even been announced yet, and we've heard this strong response. I'm not aware of how often we tend to hear these strong rebuttals coming from companies. NVIDIA usually keeps relatively quiet about these political changes.

You know, Caroline, I'm glad you framed it that way because this was a really unusual comment from NVIDIA. And we also heard objections more broadly from the group here in Washington that represents the chip makers industry. And they together were

criticizing very harshly the Biden administration move ahead of its release, saying it would be unnecessarily restrictive on whatever Trump may want to do with foreign policy, but it would also inflict wide pain on other parts of the economy. Think the gaming industry, think computing, and everything

Just think, back in September, when he was asked by our own colleague, Tyler Kendall, Jensen Wang said, look, we will abide by any restrictions and government policies. And now he is saying, earlier this week, he told our friend Ed Ludlow, he is interested in meeting with Donald Trump. And so this would give them something very much to talk about as a new administration takes office.

It would. Bloomberg's Mike Shepard across what we anticipate to be the latest announcement out of the White House. Thank you. Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York. A quick check on these markets. Look, I want to focus in on what has been a macro story of the day as well. Jobs numbers really strong, 256,000 added. What does that mean in terms of the Fed policy? Rate cuts on pause. Of course, growth stocks pull back. We're down 1.9% on the NASDAQ.

biggest drags to the downside. Also, Apple, Nvidia, of course, we've got key nines on what is going to be announced from the White House in terms of further limitations on exports from Nvidia to the rest of the world. That's playing on the stock. But on the upside, key point driver on the green side is Meta. And of course, that is feeding into where our key story is today, TikTok.

What to expect today around what's happening over in Washington? Of course, the Supreme Court hearing arguments about the future of TikTok. That, of course, plays into Meta's hand if indeed TikTok is indeed banned. Let's get to Bloomberg's Kurt Wagner because it's interesting Snap and Meta trading higher. It feels as though in the court it doesn't seem to be going their direction for TikTok, Kurt.

Yeah, I mean, we're only halfway through right now. The lawyer for the creator aspect of the lawsuit is making his arguments before the court. But the first hour was TikTok's lawyer. And I listened to the whole thing. I don't listen to a ton of Supreme Court oral arguments, but I walked away feeling that TikTok's in real trouble. A lot of

the justices did not seem convinced with TikTok's argument that this is a free speech issue. A lot of them pushed back on the idea that, you know, it's not just speech. This is also a data and a security issue. And so they did not seem convinced, from my opinion, as to what the TikTok lawyer was presenting this morning. And certain analysts, Morgan Stanley, for example, have theorized what would happen if indeed TikTok is banned. Money goes to Snap, potentially, but the key winners, Meta, YouTube. Kirk, can you...

spell out who the winners and losers are and what it means in terms of advertising revenue here.

Yeah, I mean, you hit the top three. I think Meta and Google and YouTube in particular are probably 1A and 1B there because they both have products in YouTube Shorts and in Reels at Meta that are essentially TikTok clones, right? So if you are a TikTok creator, if you're a TikTok user, very easy to migrate to one of these other services. And they both have massive advertising businesses already. So I think they don't have to do a lot different to really capitalize on

on the fact that all of the money that's currently going to TikTok will need to go somewhere else. So I think there's a very obvious reason why Meta stock is up right now today. It's that people see there's a real potential for this mass migration of users from TikTok over to Reels if indeed TikTok gets banned.

Kurt Wagner, with the latest from the court and what it means for the rivals, we thank you. More on TikTok's impact on the social media landscape. We're pleased to welcome Shweta Kajuria, Wolf Research Global Internet Managing Director, who has thought long and hard about who the winners and the losers are. Shweta, just take us to what you're reading of the tea leaves of the arguments right now. It doesn't seem to look good for TikTok.

I agree. First of all, thanks for having me. I actually listened to part of the arguments this morning, and I know it's far from over, but my understanding from, and I don't do a lot of these Supreme Court argument hearings either, but I guess my understanding is that the TikTok lawyer did not come off convincing enough for the justices, and not only around free speech, but also around the

privacy and security, national security of U.S. citizens. So with that, why is... We are already seeing stock reactions as it relates to the Internet name. Snap is up, as is Meta, and as is Google. Based on our research...

we think that there is an 8% to 10% upside to Meta's earnings per share. That's quite meaningful because we think that over 50% of the time spent can actually be going to Meta Reels as the number one beneficiary. For YouTube Shorts, we think that about 30% to 40% of the time spent on TikTok today could go to YouTube Short. And we think that there is about 5% to 8% upside to YouTube's revenue. And then for Snap,

Part of the reason why it's trading up so much is because of the volatility around how much benefit Snap could have on a smaller base. And we think that it could be about 5% to 10% of its revenue, even if only 10% to 15% of the time spent today on TikTok goes to Snapchat. Wow. And, of course, eyeballs and...

focus of a consumer means more advertising revenue. Ultimately, is that also how it's apportioned? Meta gets the bulk of the advertising revenue that currently is sent towards TikTok's direction and then it's apportioned to YouTube and then Snap as well?

That's exactly right. And what we are actually hearing from advertisers right now is that the budgets have actually not yet migrated, even with the upcoming risk of TikTok being banned. I think the advertisers want to see the ban being implemented and then transition the ad dollars. In part, with Snap, there will be integrations required for those advertisers who have not integrated with Snapchat just yet. But what we're also hearing is that that work has already begun. Shota, that's so interesting because...

if advertisers, marketers aren't changing yet, the reason is because there was 170 million US users of TikTok who really liked the product. And from that perspective, do you think that actually it does just overnight go away? Have you thought through the action of if indeed it is banned, what technically happens and if we see users migrate, how long that takes?

I believe that it will be a moderately fast leak. I don't think it will be overnight that the advertising budgets will be shut down, in part because there will be still some TikTok users in the United States. I mean, users won't be able to download them, and service providers will say that we are not going to be supporting TikTok, but there will still be millions of users and eyeballs on TikTok platform. And the technological integrations of ad dollars going away from TikTok into meta may not

all happen overnight as advertisers still trying to figure out how they want to shift their budgets and what kind of targeting they want to do. So it will be a slow lead. My guess is that it'll probably take about a quarter or two before most of the budgets will move.

Shweta, at the start of the show, we had Frank McCourt Jr. join of Project Liberty. He, as far as he's aware, has made the only bid for US TikTok, asking ByteDance ultimately to sell, which they promised thus far not to do. But have you thought through the likelihood of ByteDance selling TikTok?

Based on the arguments this morning, it did not sound like that would be a very high likelihood outcome, whether that was even a possibility in a 90-day window or even in a 180-day window. So I would be very surprised. I would put it in a low probability scenario where that actually happens. I'm not sure if they actually want that to happen.

If we're speculating, so to speak, on who the buyer could be, I mean, I wouldn't be surprised if Elon Musk makes a bet. He already has Twitter and he has the resources to do so, too. But I just don't think that that will be a high likelihood scenario that they actually sell the asset.

Amazon has been another name that's been thrown out that would benefit by purchasing TikTok, for example. So the next steps from your perspective, how do you start to judge the day reactions of these companies followed by the, as you say, potential, what did you mention for Meta, up to like 8% to 10% upside in terms of revenue? How long a path for this share price reaction to last, do you think?

I think it'll be sustained. Today's hearing will be, whether the Supreme Court tells us their decision today or not, the way it goes will be very telling in terms of the likelihood of the outcome, because it seems like it will be binary whether TikTok is banned or Supreme Court is going to bring it as a hearing to see what happens.

If TikTok is expected to ban, then the rally actually stays and there will be a lot more interest from investors on Meta. And in fact, the potential overhang on these stocks, on Meta and Snap, on the uncertainty of where TikTok, whether TikTok will be banned or not, will be lifted. So that in part will also be a relief.

Shredda Kajuria of Wolf Research, great to get your take on the implications of social media. Thank you. Coming up, look, we're going to delve into LTK President Amber Venn's boxes perspective. She's got the take on the fate of TikTok as it impacts the creator economy. This is Bloomberg Technology.

89% of business leaders say AI is a top priority, according to research by Boston Consulting Group. But with AI tools popping up everywhere, how do you separate the helpful from the hype? The right choice is crucial, which is why teams at Fortune 500 companies use Grammarly.

With over 15 years of experience building responsible, secure AI, Grammarly isn't just another AI communication assistant. It's how companies like yours increase productivity while keeping data protected and private.

Designed to fit the needs of business, Grammarly is backed by a user-first privacy policy and industry-leading security credentials. This means you won't have to worry about the safety of your company information. Grammarly also emphasizes responsible AI so your company can avoid harmful bias. See why 70,000 teams and 30 million people trust Grammarly at grammarly.com slash enterprise. That's Grammarly at grammarly.com slash enterprise.

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Now, as the Supreme Court is hearing arguments on the future of TikTok in the United States, let's take a look at the app's impact on the creator economy. Here's what TikTok's CEO had to say about that a couple of months ago. Creators from all around the world come to TikTok to be discovered, to find an audience, to live their dreams of fame and fortune. Now, in addition to launching countless global stars...

The discovery and authenticity that define the TikTok experience have also made the platform a home to serious issues that are vital to the global good. Let's bring in LTK co-founder, President Amav Vensbox, who knows a thing or two about these content creators worldwide. How are they reacting at the moment?

Well, Carolyn, I have to start out by acknowledging what's happening with the wildfires in L.A. Our thoughts and prayers are with the huge portion of the LTK community that's impacted. Today, we have 10,000 creators that are operating their businesses out of L.A. County. And so I'd be remiss not to acknowledge that they really have had a struggle at the start of this year, both with how they will operate out of their homes and with what products they're

that they show to their audience. And then now also thinking about rehoming their communities. So I did want to start there. Well said. Thank you. Amma, do you want to then, having discussed, of course, the heart that goes out to a lot of your user base, a lot of your user base are therefore also having to analyze what's happening in Washington at the same time.

Exactly. Well, you know, on the TikTok side, we've had nine months to prepare. And so we have been educating our creators about what they can do to get their arms around their audience. We call it meet and keep. And so over that period of time, they've been educating their communities of where they can be found. What we've seen in the numbers is that with our TikTok creators specifically, they've launched their LTK pages. They've actually produced

twice the number of video in 2024 versus the year prior. And I would describe that as really making a house a home. They want to make sure that when that community transitions to the LDK, that they have a place that they love and they're getting tons of content there. That has returned in material growth in their earnings. Our TikTok creators earned twice as much last year as the year prior. So they've got a way to really transition that community. And then

On the brand side, we've actually seen that brands intend to spend more on creator marketing in 2025. That was a finding from our Northwestern study where we pull the CMOs both inside of LTK, all 8,000 of them, plus those outside of our universe. They all expect to continue to grow their investment. And I know Goldman still says that by 2027, they expect this industry to be worth $500 billion. So these brands are not slowing down their investment in creators.

They're really seeing it as a channel play and not a platform play. As you mentioned, money, marketers looking at LTK, but where else do you think will ultimately benefit? If, for example, it is indeed banned, is it immediately meta that benefits the most? Is CMOs going to be putting most of the advertising dollars that they would have spent on TikTok to Instagram?

Right. I think the biggest losers certainly would be TikTok themselves. You know, they're losing $8 billion, it's expected, of revenue. And of course, they are based in Asia. And so that revenue is going to their kind of homeland. On kind of the biggest winners, I do think that Meta will be the biggest winner out of this. I echo your other guests that we saw here today. Really from the creator industry side, though, CMOs are putting their dollars with the creators themselves.

Those creators are on average four different platforms today. And so it will ultimately drive content into the other existing social platforms. I think Meta will be the biggest winner there, followed by YouTube and then on down the line.

What's interesting is ultimately how creators themselves, not only are using TikTok and other platforms to tell people how to circumvent any future ban, maybe trying to advocate the use of VPNs, but have they been migrating their user base to other platforms? They said they've come to you a lot more with LTK, but have they managed to convert their YouTube audience, not their YouTube audience, TikTok audience over to YouTube, over to Instagram ahead of this?

Yes. And actually, so for LTK, the way they're thinking about us is like the home base for across all of their platforms. Like where can they gain ownership of that community? Because you have to think what's happening with TikTok is a revolution. This is a moment in time where it might go away entirely. But what we've seen over 2024 is evolution of every other platform. So whether you're looking at YouTube shorts or you're looking at what's happened to

across Instagram. It's no longer a place to follow people or be part of a community. It's an interest-based entertainment platform. So creators across the entire creator economy have been looking for where they are going to house and have ownership of their audience. We've seen that in Q4 specifically, those last three months of the year, we saw a tremendous uptick in TikTokers. A couple

applying to LTK to get their shops launched so that they can have their home base there. But it's a trend across the entire creator universe where they know they've got to get their arms around that community because the most important thing about their ability to continue their business is their reachable, engaged audience. And the problem is not just here on TikTok, it's across all platforms today.

What's interesting is there is a smaller probability that ByteDance does decide to sell. If it does, and we have a change of ownership and a change of the underlying algorithm, how sticky do you think the 170 million users of TikTok or indeed the content creators on there actually are?

You know, I actually believe it's an algorithm preference. There are some unique things about TikTok when they first started, specifically around music. I think those things have become a little bit more ubiquitous. But I think we learn a lot by looking to Europe. You know, TikTok does exist in Europe, except that they have much more restrictive privacy over there versus what we have here in the United States. And TikTok has not really been able to grab hold of

of the European customer the way it has the United States customer. If you have a TikTok that's not, I mean, excuse me, if you have an algorithm that's informed by less data, it's just inherently lesser. And so ultimately this becomes an algorithm choice for our U.S. consumers. I do expect that

You know, the patterns that we've created as individuals of how much time and how frequently we are picking up our phone. I think I just read that the average American user picks up their phone over 2200 times a day. What are they opening? They're looking for entertainment. I don't think that they're going to stop that behavior. I do believe that there's going to be a lift and shift to other platforms and creators are hoping that that lift

comes directly then over to them as creators so they can continue their businesses. Because remember, the platforms are not the ones that pay creators. Creators are responsible for building their own business and their own revenue streams. But except for YouTube and long format, they are really not being paid at scale or really any meaningful way by the platforms directly. So it's very critical that they own that customer relationship so that they can create those businesses around their reach.

Amber Vensbox, I'll let you go back and tap for one of the 2200 times you're going to be picking up your phone today. LTK co-founder, president, it's always great to have you. Thank you. TikTok fighting for its future in the Supreme Court. Let's bring back Bloomberg's Tyler Kendall, who is outside that court. And the latest in terms of the arguments, I understand U.S. Solicitor General Elizabeth Prologar is now testifying.

Yes, she's representing the federal government in this case who is arguing that this is an issue of national security. Before that happened, though, we just heard the lawyer representing TikTok creators wrap up his statements to the Supreme Court. And Jeffrey Fisher made similar arguments to what we heard from TikTok's lawyer earlier.

earlier today that this is an issue of freedom of speech and potentially curtailing the freedom of expression of the nearly 170 million U.S.-based users who use the app. Now, it does appear that the Supreme Court justices are signaling they are skeptical to that argument. I've been struck just how many times they have brought up the specifics of the tech

of the bill that Congress passed saying that this is not an outright ban, that the law could knew that the app could still continue to operate. Rather, it is a choice and that the app has to divest in order to maintain its platform. You'll recall, of course, that this

text was originally introduced by the China Select Committee on a bipartisan basis over those national securities concerns. We even heard Chief Justice John Roberts hit on that, saying that Congress is not concerned about what is on the platform. They are concerned about what the federal government calls a foreign adversary holding. Who owns the platform? Tyler, what's also so intriguing about all of this is President-elect Trump and where he feels the delay should come in.

Right, exactly. So a lawyer for Trump actually filed a front of the court brief last month requesting that there be a delay and citing Trump's own negotiation skills, saying that he could ultimately help reach some sort of agreement between the parties to get this done and as well as address those national security concerns. Now, if this ban is put into place, we actually heard this come up in the

questioning whether or not Trump could delay it further. We know that the law was written to include a 90-day pause if there is a potential deal on the table, but of course that would have to materialize. He also could potentially instruct his Department of Justice to not enforce it. However, that would open him up to legal scrutiny. And then lastly, he could try to work with Congress to repeal the law that they put into place, but

That appears highly unlikely considering the bipartisan support that this bill originally received when it passed back in April. I'm talking about unlikely allies coming together to push it forward, such as the Democratic House leader, Hakeem Jeffries, and House Speaker Mike Johnson working hand in hand on this one.

Hmm. Bipartisanship perhaps has its limits. Tyler Kendall, we thank you so much. Let's get out more for intricacies around the legal arguments. Bloomberg's Sarah Forden for more in D.C. And you're really analyzing how it's all unfolding inside the court. The arguments, anything struck you?

Well, first, let's go back to the legal framework, why this is in front of the Supreme Court. They're basically being called to decide on a request from Trump to pause the start of the ban January 19th. So they're going to have to decide, do they pause the ban? And if they do, is it just a temporary pause so they can figure out what they want to do on the underlying issues of the law?

or is it a permanent ban? They're also being asked by TikTok to ponder the national security versus the First Amendment rights question. Of course, TikTok is really, really bearing down hard on the fact that this reflects a violation of people's First Amendment rights.

But then you have the justices coming in and saying, well, actually, foreign actors don't have First Amendment rights the way Americans do. So there's a lot of parsing there. Is TikTok considered a foreign actor? It's technically a U.S. company, but it's owned by a Chinese company. And so there is so much to unpack in these arguments. There is. Very briefly, probability of 30 percent that TikTok wins is what Bloomberg Intelligence thinks. Have you got a probability at what people have been saying?

Yeah, I mean, I think that our analyst is really calling it pretty correctly. And as we're seeing, as Tyler mentioned, the justices are expressing a lot of skepticism about the First Amendment arguments, and they are also raising concerns about the national security arguments. It's true that we don't have as much visibility on what the government feels is most concerning about TikTok, but we've had a lot of examples of propaganda, data security issues.

privacy and more. Sarah Forden, the latest from DC. We so appreciate it on those legal arguments. But that does it for this particular edition of Bloomberg Technology. Do not forget to check out the podcast. You'll find it on the terminal as well as online on Apple, Spotify and iHeart. This is Bloomberg.

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