What the TikTok Ban Reveals About US Tech Policy

Jacob Silverman


Paris Marx is joined by Jacob Silverman to discuss the motivations behind the proposed TikTok ban and what the effort tells us about US tech policy.


Jacob Silverman is a tech journalist and the co-author of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud.

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Paris Marx: Jacob, welcome back to Tech Won’t Save Us.

Jacob Silverman: Thanks for having me, again.

PM: Always excited to dig into all these topics that you tend to cover, especially to focus on the right and tech fit so much into what we talk about on the show all the time. And of course, listeners will not be surprised to learn that the US has TikTok in its crosshairs once again. Has passed a bill that a lot of people are calling a TikTok ban that at least the text of the bill is not explicitly a TikTok ban, but it looks like it’s structured in such a way that it would basically be that even though it’s not explicitly that. What is this bill that the House recently passed, and what would it mean, if it does come into law?

JS: Sure. Well, it’s interesting. I mean, it’s called the Protecting Americans from Foreign Adversary Controlled Applications Act — one of these typically cumbersome names for a piece of legislation. It’s both about TikTok and it’s not. I mean, it’s not a very long piece of legislation, a few pages maybe, but it mentions TikTok and ByteDance in the beginning. It talks about successor applications. But as you say, it’s really about this broader class of applications and services and software that are being defined almost for the purposes of this legislation. It talks about prohibiting foreign adversary controlled applications. I think they say anything with a million or more users in the prior month, with a fair amount of discretion, being allotted to the President of the United States to determine whether a company has to abide by this act. Anyway, the legislation basically says a company that fits under this criteria, of which TikTok is only named one, would have I think it’s 165 days to divest from his ownership. So if this passes sometime soon, which we can talk about, it’s no sure thing this week, compared to last week. But it would probably mean that by September TikTok would have to find a new owner.

PM: Obviously, as I was saying, we know that the United States has talked about a TikTok ban and there have been previous bills that have suggested that there might be one. This talk of a potential TikTok ban began under the Trump administration a number of years ago, and has reemerged at various moments. Is it likely that something like this, because as we say, it was passed by the House, but it would still need to make it through the Senate? Then, of course, be signed into law by the President, Is it likely to continue through those steps? Or does this just look like some political statement by particular people in the House of Representatives?

JS: It’s hard to say in some ways. Last week, people seemed pretty sure because you had Chuck Schumer — the Senate majority leader, who helped set the agenda of what the Senate actually considers — seemed somewhat positive about it. Also the chair of the Commerce Committee in the Senate, Senator Cantwell, was indifferent to positive. But that’s what you’re starting to see now is these Democrats who were on the hawkish anti-China side and who are willing to help push this forward along with their Republican counterparts. Some of them are now sounding a little more uncertain. Ron Wyden, also, I believe, said that it needed a little more consideration. There hasn’t been a lot in the Senate that I’ve seen, especially among Democrats, where they’re saying: Absolutely not. They seem a little more diffident and willing to slow roll this. I can’t read the tea leaves entirely and tell you how that’s going to shake out. But on the other hand, I think it could still very well happen. I think it’s a bad idea for reasons that we’ll get into and I think it’s a bad idea politically, when a lot of people like TikTok, has a lot of users. It doesn’t just have young users, which some recent research has shown, it has a lot of middle-aged and older people on it, too.

So it seems like banning something that people like, even though you may have geopolitical reasons, right before an election is not a great idea. So maybe you could put a 50/50. The other relevant factors that Biden has said he would sign this, and he’s been encouraging it. So it does seem like right now it’s in the Democratic Senate leadership’s hands, and that no one is really forcing them. Biden would sign it, maybe someone might nudge him and say: Is this really the highest priority for you? By the end of this week, we may have a better idea of its ultimate fate in the Senate. But I would say that TikTok is going to live to at least fight on for another couple more weeks. And they’re also hiring tons of lobbyists, which is worth noting, from all these different lobbying shops on all sides of the political spectrum. So that potentially works in the company’s favor over time.

PM: I saw, the CEO, Shou Zi Chew, he was at the House, it must have been, recently and he was using a line that I’m sure I’ve heard Mark Zuckerberg say in the past that: If TikTok is banned; it’s going to impact 170 million Americans who use our app; it’s going to impact 7 million small businesses, and I hope their voices are heard. This is a line that the other tech companies and social media apps have used in the past. I guess it’s not surprising to see them rolling it out now, but it’s also not the argument really hits home with me, at all, as a reason not to move forward with this. Even though as I agree with you, I think it’s a bad idea and shouldn’t happen.

JS: I’m not really one to criticize the ban because TikTok is so useful or small businesses run on it. That was, at least, a little more visibly clear with Facebook, that small businesses rely on it, for example. But at the same time, just broadly speaking about popular culture and social media and where TikTok fits in, people like it. I don’t think, at least before the latest war, or the Israeli campaign in Gaza, the genocidal attacks there, I don’t think it had much of a political valence for a lot of Americans. We knew it was Chinese, but this is one reason why it hadn’t really been banned before, I would argue, despite several attempts. They tried to paint it as this Chinese threat and this espionage foothold that the CCP has in the US, and being able to spy on 100 million US users, but that didn’t seem to hit home for a lot of people. Perhaps because a lot of Americans don’t think about a war with China, or are certainly not eager to get into one. So this idea that China’s spying on us, even if you buy it as face value, doesn’t seem like an immediate threat or concerning in that way.

PM: Unless you get a spot on a cable news show and you can be a pundit on there, then that might be of greater interest to you, starting a war with China, it seems.

JS: It’s just the concerns, that, I mean, obviously, it can get you a job in national security or in affiliated media. But if this ever actually happens, one, the US will probably lose, but everyone’s going to lose. I just don’t know. You can sound a little naive or handwaving in being anti-war like this. But is this really something we want to take seriously? Do we want to run back another Cold War like this? I know we’re going to get into some the broader issues later, but this also does speak to broader attitudes towards China, and the chip war against China, which I see as somewhat misguided. Where does this kind of stuff end — are you going to only choose TikTok? Are you going to go after WeChat and other services? If you really want to fight this trade war, economic war, against China, which could become a hot war, if we’re not careful. It has very wide potential applications. They’re still the workshop of the world. So this isn’t just a one off thing, potentially.

PM: Absolutely. I completely agree and we’ll definitely get into some of those bigger issues. I wanted to start because you mentioned the recent stories that we’ve been seeing over the past number of months that TikTok is explicitly pushing out pro-Palestinian messages, and even anti-US content. And that this is something that is being engineered by China, by affecting the algorithms and stuff like that. This is one of the charges that is being made by people who are opponents of TikTok and people who believe that China is trying to interfere with US politics and whatnot. I would not be surprised if some of the very old people who run the United States actually believe this stuff, because they don’t understand how this tech actually works. But what do you think?

Obviously, we’re seeing this TikTok ban or whatever you want to call it move forward right now. Do you think that that story about pro-Palestinian content being pushed by the platform, in a way that people believe or at least the media is suggesting, that it’s not happening to the same degree on other platforms? I think that there have been stories that suggests that that’s not necessarily true, just because a lot of the public opinion in the United States and other countries does not align with where the political leadership and things like that are. But do you think that that content and those stories about tTikTok pushing out pro-Palestinian voices is something that is shaping the debate or pushing forward this TikTok ban right now? Or do you think that that is more so being used as justification for a broader desire that has been there for a longer period of time to try to kick this app out the door, basically?

JS: I think I see it a little more as in the background or greasing the wheels a little bit to mix metaphors or images. I’ve heard some leftists, understandably, say: This is very much about Palestine. I admit, I’m not as inclined to agree, but I think you did hit on something important, though, which is that there’s a big gap between how a lot of Western leaders and elites see Israeli actions in Gaza — I mean, they’ve basically sanctioned it or are outright supporting it, of course, with the US — and how most people do. So, I think that alone is this wide gap and public belief, and public opinion, between everyday folks here in the US, as we’ve seen in lots of polling, and in other countries in Europe and elsewhere. That gap between them and their leaders explains some of this. So there’s a simple fact that people on TikTok — the people who use it, just like people on other social media platforms — are perhaps, a majority of them, are very upset about Israel, and what they’re doing in Palestine and the huge number of people they’ve killed.

So you’re going to see that reflected in the content that people create, and what gets shared and everything like that. The related issue is that a lot of people now almost, two decades into the social media era, people have an understandable suspicion of platforms or dynamics and algorithms. But I think they don’t always know, through no fault of their own, but they don’t always know how to talk about this stuff. Maybe there are some decent quantitative studies out there, or some soon to be done, about TikTok trending topics and what’s promoted and algorithmic influence on the platform side. It’s really hard to gauge so people do fall into a little bit of conspiracizing and speculation, I think. That’s where you also get some of the: Well, this is really about Palestine stuff. So while it’s just a cultural background level, and what probably some of these political leaders are seeing day-to-day. I’m sure they’re bothered by the pro-Palestinian sentiment on TikTok, but to me, I would situate it in the larger context of China, and of this also just simply being a competitor to us social media companies.

Maybe if this company were German, we’d be having a different conversation, but I still think there would be some suspicion of it as a competitor to US social media companies. So I don’t want to ignore the Palestine stuff. It’s also worth noting, perhaps that TikTok has been a great source of these horrific Israeli videos of the IDF soldiers cataloging their own war crimes or simply documenting some of the things that they’ve done. Sometimes it’s just callousness, sometimes looting and war crimes, and some very serious stuff. And that stuff showing up on TikTok, it seems to be the dominant medium for the that besides Telegram, perhaps. So the politics of TikTok and the kinds of political material that people put on there can cut various ways. So I think it’s worth paying attention to how Israel and Palestine relates to this stuff, but I would not claim it as the driving factor of the moment.

PM: I think that’s a really good point, I completely agree with what you said there and the other thing to add to it as well is that, on the one hand, you have these pro-Palestinian sentiments being echoed on TikTok, in part, because the user base is feeling that way. So naturally, that is the kind of things that are going to be spreading more there. There was a story by Taylor Lorenz in The Washington Post the other day, suggesting that on Facebook and Instagram, things are overwhelmingly pro-Palestinian as well just that doesn’t get the same degree of attention that it does on TikTok. Of course, we know that US social media companies have for a long time, had a censorship regime on pro-Palestinian content and sentiment. Where if you use certain words or phrases, they would easily be picked up by the algorithmic content moderation systems that they had to be suppressed or removed. In a way that a lot of more pro-Israeli content, or just the content talking about what’s going on in Israel, was not to the same degree. So I think that’s potentially notable as well, where it doesn’t seem like TikTok has that. Listen, I’m not a total expert on TikTok, But it doesn’t seem that TikTok has that same degree of overt desire to silence Palestinian viewpoints, as say, Facebook and Instagram have had for a long time.

JS: Also, in kind of a grim way, we’ve had years of experience with Facebook and Instagram and these other conflicts, and to some degree, Twitter/X. We have both the experiences of Palestinian activists and their supporters being suspended or banned or having content deleted, going back 10-15 years. Then also there have been some useful leaks from inside those companies of their content moderation standards and things like that. I think Sam Biddle might have done one related to Israel and Palestine for The Intercept in the past, but that kind of information, those leaks, while hard to come by can be very important because they do validate those suspicions, and they validate people’s experiences. It would be great, frankly, to get some leaks from inside TikTok and have a better understanding. Both of the things that the Western NatSec crowd worries about, whether to prove that or disprove it, and I know there’s been some reporting on that, and who might have access to data there. But also to understand better how they moderate content and what the policies might be underlying this stuff. It is hard to critique the stuff in the dark, or in the semi-dark without that information.

PM: It would be really good to know and that would be, potentially, something that could be regulated to say to, not just TikTok but all these social media companies, need to be more transparent about the way that they do content moderation on their platforms. Maybe a certain legislative body could look at that.

JS: Well, I think that actually gets to something really useful, which is you can just glance at the text of this bill and see how broad it potentially is. It mentions ByteDance, and TikTok and their subsidiaries and successors, but also says: Any company controlled by a foreign adversary or that is determined by the President, as presenting a significant threat. Like this is a very quick and broad and dirty solution to something, whereas there are people like Ro Khanna — a member of the House of Representatives, basically covering Silicon Valley — he was saying in an interview with ABC: Why don’t we use this opportunity to have data protection regulation, and you can have a bill covering where data goes and when it goes abroad and leaves US, with foreign control companies and stuff like that. It doesn’t have to be purely couched in NatSec militaristic terms, and can actually be based on the years of scholarship, of political activism around this stuff. I’m sure the legislation is sitting on someone’s shelf. What we really need is more of a series of bills around issues like data protection and privacy, data sovereignty, surveillance capitalism, the ad economy. Some of which are not going to come probably, but some of which we could do. Even some of the people in Congress, compromises they may be have a sense of that.

PM: Absolutely. Just to pick up on what you’re saying there. Some of the arguments for this ban — some of the ones that are being made by members of Congress and people who support it in the national security community, of course —would say that we need this or the United States needs this because, as we were saying, the Chinese Communist Party can manipulate the algorithm to shape what Americans can see,. Or because TikTok is operating in the United States, that means that China or the Chinese government can get access to US user data. But a lot of these arguments seem to really fall down as soon as you start to probe them in any kind of way. The idea that China can get access to all this user data is one misunderstanding, the way that ByteDance and TikTok itself are constructed and owned. The fact that TikTok has its US user data on Oracle servers in Texas, as I understand. But also the fact that if China really wanted that data, there are tons of data brokers that they can buy it off of without jeopardizing the credibility or position of TikTok within the United States and the global markets where it operates.

JS: That’s a great point and something that I’ve been trying to think about more lately. Byron Tau from the Wall Street Journal has this new book, I forget the title, but it’s about data brokers and national security. And it’s based on a series of stories that he did over the last couple of years about how the US government and intelligence agencies and the Pentagon are buying tons of consumer data from App companies and data brokers. Some of them received more attention, like there were stories about these Muslim prayer apps selling user data. And you can immediately see why that’s alarming of the GPS coordinates of all these Muslim people and where they go throughout the day. But this is so big and so broad, I haven’t read Byron Tau’s book yet. But those articles that he wrote for The Wall Street Journal are good and very interesting. And it’s so much bigger than just, you know, than any one company. And we do truly live in a surveillance saturated world that contains many actors, both private corporate, acting legally, government actors, intelligence agencies, and also everyone in between acting, sometimes acting in gray areas or illegally.

And as you said, China has an immense surveillance apparatus. And I’m sure that they buy data from data brokers, whether domestically or through cutouts overseas. There have been plenty of articles about Chinese hackers and others who sort of work for the state in some kind of informal formal relationship. I mean, those sorts of things happen in Russia, they happen here. And here, we just call them military contractors, you know, so it does sort of hint at what a bigger world this is, and what a bigger problem is. And I think also one issue is that people who might be supporting this bill might think that they’re actually solving a problem when it’s really like a really crude game of whack a mole or something like that. I mean, I don’t even know if you’re really solving even one small problem of the suppose that problem of TikTok which we can also question whether it really is a problem or how to actually define it. So as long as you have this, both unfettered collection of data through legal and illegal means, and through commercial and espionage style means and then the practically unfettered sale of it, this is just gonna go right around any ban that involves TikTok.

PM: This is the hypocrisy that you see with it. But also, you know, the fact that it doesn’t make any sense. If you were really concerned about China getting access to us user data, you wouldn’t just simply target TikTok, because there are a ton of other Chinese owned or apps that are owned by Chinese companies that are on people’s phones that people use really regularly, even things that are like not big names, like she and her team who are something like that. But just apps that happened to me made in China that are actually really popular camera apps and editing apps and things like that, right, that are very widely available that are not touched at all by this or, I guess they could fall under it. But there’s no talk from any politician about targeting those sorts of things. But then even broader than that, if you are really concerned about China, getting access to user data, the idea that you’re just going to ban TikTok and then allow every other social media company and data broker to continue operating exactly as they do. It’s very clearly not going to solve the stated problem. So it’s hard to believe that that’s really the issue that they’re concerned about.

JS: I think it falls under this ongoing issue of the US being very selective, I think, in how it addresses kind of cybersecurity and privacy and data issues. It seems very opportunistic and limited to specific examples, rather than maybe building up a more robust regime of legislation and privacy laws and, and kind of a more defensive mindset of protecting American infrastructure and American consumers and fixing stuff. I’m not a telecoms expert, but there’s this widely known vulnerability called SS7 [Signalling System No. 7] in the telecom system, both here in the US and I think in a number of other countries. And, all kinds of people have been saying this should be fixed for years now, but it basically hasn’t because it very much facilitates surveillance and eavesdropping. And so the US obviously makes use of it, but so do foreign countries. And there have been similar discussions around vulnerabilities in software, zero-day vulnerabilities.

There’s a whole disclosure process and meetings that take place at a very high level between intelligence agencies and stuff like that to decide: Are we going to disclose this Windows zero-day vulnerability? There’s a real process, and people do take it very seriously. But all this stuff seems rather skewed towards offense and towards maintaining us omnipotence and surveillance supremacy and being able to see everything and access every system. And as a result, I think this is a problem is a technological problem. As we’ve said, a legislative and regulatory problem, it’s even problem to like, on the level of competition or antitrust. I mean, we could we could bring in that this medical billing company, I think you call it, Change Healthcare that was hacked here in the US that’s owned by UnitedHealth, that has become perhaps the most catastrophic attack on the US healthcare system, ever.

Even my wife, who is a therapist, has had some problems getting paid by insurance companies. It’s all over the place in the health care system here, the sort of knock-on effects. But one thing you could say there was one, there were probably bad defenses on the cybersecurity side. But also, this was a huge concentration of industry power in one company that was really the linchpin of a lot of the financial side of the of the US healthcare for profit healthcare industry. So there’s so many ways, I think that you can go about addressing some of these issues that can really improve both anything from the American economy, to our sense of privacy. And we’re simply not doing that. So that’s what I think also another reason why you hear some experts, or people on the left or academics get a little frustrated, when all this activity goes on around doing something about TikTok when you’re like: Well, what about everything else?

PM: Absolutely! It’s so fascinating to hear that bigger picture, though, of how this works, especially, you know, the communications between intelligence agencies that are obviously naturally going on, but are not things that the public or people generally like hear about, often right or would know about. But yeah, it makes perfect sense that all this stuff is going on, I want to come back to you know, that broader conversation, you know, the international aspect of things. But I want to talk a bit about who stands to benefit if something like this, were going to come through. And you had a story in the nation last week, where you were talking about one of the many right-wing billionaires that we often talk about, but one that many people would not know about. He’s not I think a well known name when we think about billionaires who are involved in tech or, or even billionaires who are like, well known in the right-wing media ecosystem and things like that. So who is this billionaire that you were talking about? What’s his connection to TikTok? And, you know, what is his orientation on this bill that is moving through the US government?

JS: So the man is Jeffrey Yass — spelt ‘y-a-s-s.’ I believe it’s pronounced like ‘yass queen.’ That seems to be the case. He is the richest man in Pennsylvania. He is relatively new to me. This is what happens whenever we have elections in the US or or some political events — time to meet a new oligarch. This is when we get to discover them. So he is the biggest donor of the 2024 political cycle so far, at least on the Republican side, according to Open Secrets. And so that’s to candidates and PACs and other organizations that require public disclosure. He has donated more than $44 million, I believe, last I checked, and he donates a lot of money to the Club for Growth, right-wing pro-business organization. The Club for Growth has hired lobbyists on behalf of TikTok, including Kellyanne Conway, the former Trump advisor.

So Yass, himself is a co founder of something called Susquehanna International. It’s a high frequency trading, financial firm. They also have their hands and a few other pies, including doing some venture capital investments. So I think it was more than 10 years ago, they made an early investment in ByteDance, which turned out really well. I don’t know the exact amount of the investment, but it was in a round that was believed to be $5 million total raised. And they’re one of several investors, so say, maybe a low seven figure investment. Now, more than 10 years later, that investment in ByteDance is worth billions. This sum is all kind of notional or on paper, but it’s been pegged at maybe $40 billion, it really depends how much one considers TikTok to be worth, and how much TikTok might eventually sell for, but we’re talking tens of billions of dollars. That’s about 15% of TikTok is what they own, and about 7% of that owned by Yass personally, because he’s one of the co-founders of Susquehanna.

So this is forms a big part of his fortune now, he’s worth something like $28 billion. Susquehanna is a dominant in options trading, is a big player in markets. He checks a lot of the right-wing billionaire boxes — he loves Milton Friedman, who told him to get into charter schools and the school choice movement as he calls it. So he funds a lot of that; he hates unions; he thinks Democratic politicians are evil. I mean, he called them evil at a recent event. He’s really into poker. He was a big time gambler, he still is, calls himself a gambler. Poker is very popular at Susquehanna. So I have to admit there not a lot of surprises here. He’s not going to suddenly show you a stamp collection or something — this is an archetypal right-wing billionaire.

PM: It was interesting. In the story, you quoted Arielle Klagsbrun, the deputy campaign director at the Action Center on Race in the Economy, who described him as a next generation Koch brother, just to give an idea of the influence that he’s trying to have over US politics. But also the issues that he has this orientation toward, as you’re saying, charter schools, which is obviously an issue that’s very popular in Silicon Valley, as well, with Zuckerberg and Reed Hastings, I believe his name is the Netflix guy. And Bill Gates, of course, all supporting this movement. But this guy also has connections to Donald Trump, and of course, you say he has this large investment, this large financial stake in TikTok. So how does that shape his orientation toward a ban? Is he opposed to it? Is he hoping that this kind of legislation moves forward, so he can get a larger stake of it? How would his approach to that be?

JS: The people of Pennsylvania say: We’ve been dealing with him there for 20 years, and now he’s taken his politics nationally. He doesn’t want to ban I’ve argued, or sort of speculate in my piece, that I think he could benefit no matter how this shakes out. Because there’s too much at stake here for 165 days to pass with no sale, and TikTok is just straight up banned. Maybe there’ll be a brief service interruption or something like that. But this is such a valuable company, and really the only major foreign competitor to US social media dominance that I think a deal would happen. But I don’t think that’s something that current TikTok leadership, or investors, like him, want to force because they may have to have a fire sale, it may not be on their terms. But still this was an investment worth up to maybe $40 billion, that they probably put in a couple million dollars, at most, like this is a lottery ticket, so I think he’s trying to protect that — a winning lottery ticket of that.

So, he’s against a ban and he was a never-Trumper sort of guy. I mean, don’t mistake him for a liberal but he’s supported a lot of other candidates in the past, wasn’t openly supporting Trump and 2020. Recently, he was supporting DeSantis. Obviously, that didn’t work out. But all of these right-wing billionaires, pretty much, are lining up behind Trump and one expects them to before the election comes around. He supposedly called Trump there’s been some debate about whether he actually called him personally, but reached out to Trump, invited him to a Club for Growth retreat earlier this year. And Trump, who as a lot of folks know, was anti-TikTok. He tried to force a sale when he was president, and it got stuff in the courts. There was a sort of partial deal made, the server deal made with Oracle, as you mentioned.

But Trump came out of that meeting saying actually TikTok is not a Chinese menace. It’s not so bad, and he doesn’t want to ban him because he sees Zuckerberg or ‘Zuckerschmuck,’ as he called him, and Facebook benefiting, which could be a thing. I mean, Facebook may benefit from a ban, they may also be able to scoop up TikTok. I think the one way — and this is sort of kind of paradoxical for the Biden administration — is that if you force a sale of this company, yes, you’re helping American interests by taking down, or at least moving, a competitor of Silicon Valley to the side. But you’re also maybe handing a gift wrap to one of the monopolistic tech companies that the Biden administration, to its credit, has tried to fight through the FTC and Lina Khan and other measures. So, usually NatSec rates above antitrust.

Yass has become quite clearly an influencer on the subject and able to kind of call up Republican politicians and persuade them. Last year, Vivek Ramaswamy, who was one of the insurgent candidates, was very much anti-TikTok, had this digital fentanyl kind of stuff. A racist, anti-Chinese attitude towards it, despite the fact that Ramaswamy himself has done business in China, for example. And then he started getting millions of dollars last year, I think he overall got around $5 million to his packs from Jeffrey Yass, and by the end of the summer he was not a critic of TikTok and basically saying: We have to meet the young people where they are and then he signed up for TikTok. The Biden administration is also on TikTok, or the Biden campaign rather.

So it’s been pretty clear where Yass’ money goes and the attitudes that follow. Rand Paul is a defender of TikTok in the Senate, this falls under some his free speech attitudes. Also his demonstrate aversion to military conflict, but on the other hand, he’s also a huge recipient of money for years now from Yass. So I think he’s going to be all in on trying to fight this and the simultaneous lobbying push from TikTok shows that on the other hand, people in his position rarely lose or end up as losers. He might not get exactly what he wants, but say there’s some messy for sale of TikTok within the next few months, I think Jeffrey Yass is likely to be in a better position than he is right now. I also think this maybe for a billionaire with ambitions to be very politically influential — this is almost a proof of concept for him. He gets to try out being the money man of the moment, as I called him. He’s the biggest donor to the Republicans of the cycle. There are other people who may pass him between now and November, who share similar interests, but right now he’s worth paying a lot of attention to. He really has found both an issue and enough money in his bank account to put himself right at the forefront.

PM: It’s really interesting to hear about that, because obviously he’s a figure that I had not heard about before I read your story. So someone completely new to us, but I think it also suggests we’ve seen a significant shift in a lot of US social media over the past couple of years. Where they have become more open to the political right, less interested in censoring or moderating extreme right-wing content and things like that, as they’ve been circulating on these platforms. Obviously, Twitter, most notably, was taken over by Elon Musk, who has become basically a far-right figure of his own and echoing all these conspiracy theories and things like that. When you look at someone like Jeffery Yass owning a stake in TikTok and the potential of TikTok being sold to American ownership. And you also see that, Steve Minuchin, the former Treasury secretary under Trump, was talking last week about putting together a consortium that would be ready to bid for TikTok if it was forced to go up for sale. So, the decision they made was to sell it instead of withdrawing from the US market. Is there an effort growing on the political right to try to capture this social media platform as well and to make it work for their political interests, at least much more explicitly?

JS: I would think so. Right now, just to be clear that Republicans are a little bit divided, because you have the militaristic hawkish xenophobic contingent, who are happy to ban this and act like they’re doing something tough. And then you have the MAGA crew and some of the libertarian types, but also just the straight up recipients of Yass cash and influence. So I think their first goal would probably be to stop the bill. But then, undoubtedly, there’s going to be a larger effort to steer this towards pro-American interests, which, by which I guess I mean, more right-wing interests. I like to joke that there are no liberal billionaires. I still think that’s true. For kind of antitrust and practical reasons, it probably would be a bad look, so to say, if Facebook or Google took over TikTok or Microsoft.

At the same time, you have very large, very powerful companies that are more overtly, right aligned. Oracle, whose owner Larry Ellison, is a big Trump supporter, held a strategy meeting to try to overturn the election, and is very wealthy. You could speculate that it’s coordinated because you see Steve Minuchin trying to take over the company. But I think it’s very possible that given the kind of where the political winds are going in Silicon Valley — and that’s something I’m increasingly arguing in my writing and in this book I’m working on — is that you see how a right-wing radicalization taking place, a more nationalistic bent, even with something like A16z talking about American dynamism. There’s this much more chess beating fervor going on in tech, in parts of finance and in venture capital. I think you’d be more likely to see a Steve Minuchin takeover.

Maybe there’s a former Activision executive, or I’m surprised that people don’t talk as much about Yass himself leading sometimes him over or Susquehanna. I mean, they’re already in there. I think there’s already been talk also about maybe some kind of partnership with OpenAI, or another company, because OpenAI would be attracted to TikTok to try to train its LLms or expand them and train its models. So there are going to be people who are salivating over this for some pretty craven reasons, and I expect that however, it really shakes out it’ll be to just strengthen those forces of capital and data hungry AI companies. Not to strengthen free speech or consumer choice, or whatever else some of those right-wing interests might claim that they’re defending.

PM: Every potential option you outline there sounds utterly terrible [laughs].

JS: I mean, we we don’t want Microsoft or Google doing it, even though they’re nominally more responsible corporate actors. I was going to say they’re not ruled by crazy right-wing defense contractors, but they are defense contractors, and they have all their own problems, of course. There doesn’t seem to be a very positive outcome here. Again, we are talking about a company with more than a billion users. This is like determining the fate of a monster tech company that activates many of the same concerns that the big US tech giants do —whether it’s Chinese owned or not.

PM: What you outlined there gets to a really important point that I wanted to touch on you with, which is, of course that for a long time, Silicon Valley tried to present itself as anti-government in a way or having at least this distance from government and being critical of it. Because we are separate, we are our own center of power over here on the West Coast in San Francisco. Obviously ignoring the long history that they had of working with the military industrial complex, the Defense Department, the Pentagon, how defense funding was essential to setting it up. But this narrative seemed to kind of work for a while. And I feel like we started to see the real transformation or Silicon Valley, cozying back up to the government, at the same time that there started to be more criticism of Silicon Valley itself, more concern about the power and monopolistic influence that they held. All of a sudden, the Chinese threat had to be brought up as something that was a really big issue and Chinese tech in particular, as a threat to US technological dominance.

Just at the same moment by coincidence that the US government was finally looking at the power and influence of its own US tech companies — of course, so then that they could argue, as these Chinese tech companies are going international, are competing with US tech firms, that actually the monopolistic power of US technology was essential, in order to try to combat the growing international influence of the Chinese tech industry. So, you can’t regulate us; you can’t do these antitrust enforcement on us; you need to step back on that, because if not, China’s going to win. Then you’ve seen the Eric Schmidts of the world, and all of these folks in Silicon Valley being much closer to the United States government, the United States military talking about how Silicon Valley can aid these efforts to protect American power, as you’re talking about, even with Marc Andreessen talking about American dominance, and how this has really been folded into the rhetoric. I wonder what you make of this in light of this broader anti-China turn that the US has had, and how so much of it has focused on Chinese technology versus American technology?

JS: A lot of good points there. I’ve said it before — and I may have even said this on the show — I think we kind of live in Eric Schmidt’s world. And certainly there are a lot of influential figures and companies and forces on this front. But this union of tech and government power, tech and military intelligence power, also people on the right sometimes worry about, sometimes in the wrong terms, perhaps, but it’s a real thing. It is one of the dominant trends of tech as an industry, as part of the new defense industrial base over the last decade or two. This is why things like the Twitter files were frustrating, because they point towards this larger issue and state of play, in which there are a lot of people from intelligence going to work in Silicon Valley. There are potentially troubling interactions between government and Silicon Valley, not every single one is a sign of villainy or whatever, as it’s sometimes portrayed. But there’s a lot of stuff going on there and a lot of complicated and troubling things — personnel, policy, contracts, everything else.

I think, to some extent, Silicon Valley, doesn’t mind shedding its own, it’s sort of former countercultural counter government attitudes, because there’s so much money in government contracting. It’s a way sort of the industry to become more comfortable with its own power, and its own place in society. So there’s hardly a big tech company that isn’t doing government contracting, or has some kind of military intelligence adjacent project. Even these cloud computing contracts are huge for Microsoft and Google and other companies, both in the US and Israel and elsewhere. Microsoft was making those HoloLens goggles for the army. There’s the Google project, Maven, but then you also see it in this more direct embrace of companies and VC funds define themselves as contributing to military dominance, so this is the American dynamism thing from A16z. As a quick aside, I find very funny because they used to say, “It’s time to build.” But the only thing they built, really, were crypto casinos and kind of financial engineering.

So now they’re supposed to finally be building stuff to support industry and infrastructure, but really it’s just like waving the flag for the American war machine. But you see that also with Palantir and Anduril, and to go back to what I was just saying a minute ago, I think these companies are actually just spouting a cruder form of Eric Schmidt ideology. Which is that pursuit of American greatness and American power, that is perhaps even founded in acceptable liberal social mores. But that is still unapologetic about American exceptionalism and contributing to that and seeing what’s good for American foreign policy is good for America’s companies. To me, that is a big part of the geopolitical context and backdrop of even what’s going on with TikTok. Again, we shouldn’t be fooled that Elon Musk and these other people actually care about free speech, whether their time on X or TikTok or anything else.

If TikTok is going to be sold and brought into the American sphere of influence more directly, it will be because it has a strategic objective animating that right now. Not really anything about free speech, or an almost antique utopian vision of how the internet should be. I don’t think there are actually people in the American establishment right now who care about the Balkanization of the internet, or concerns about people’s free speech rights on TikTok. If we take a moment to look at that are kind of acknowledge that, I think that’s actually a reminder of how much things have changed. We’re not even really paying lip service to the old utopian rhetoric of the internet of connecting people and improving life. And then one other thing I would say, is also just a refer to something you brought up, there’s this idea that we have to be in this competition with China, because they are going to win, whether it’s TikTok, or now we hear a lot about AI. I still want to know: What are they going to win?

As you and I, and other critics have said, the supposed the benefits of AI seem very undefined or diffuse or yet to arrive. I would say that maybe we treat a little too monolithically, and generative AI is different from other forms of AI that might drive a car or something like that. But at the same time the end goal here — the thing that we’re really supposed to be in pursuit of, and the of victory we’re in pursuit of — remains very nebulous to me. The cost seems to be all this interference in the economy, and in sort of geopolitics and national security, and to fight what’s really an open-ended economic and technological war against China. When does this end? When does someone declare victory in AI or in chip-making, or wherever else? I think that if we even managed to deal with Tiktok, successfully — I mean, as a country, or as a political grouping — we’re going to be fighting this chip battle and this AI battle for the foreseeable future. To me that, in its own way, seems strategically unwise that’s its own forever war. I don’t really see how that benefits anyone.

PM: Just setting themselves up for failure in a way. There’s so much interesting stuff that you said in that statement that I want to pick up on. Especially as someone who is not an American, and who is kind of watching this happening from afar, still pretty close.

JS: You’re stuck with us! But you have less power.

PM: Exactly. I’m watching, I’m still across the border. But at the same time, it’s like when you watch these discussions happening in the United States, it’s like: We need to do this to protect American interests against China, and all of our allies just need to come along with us and accept this. I don’t know if this is happening, but I hope it is in a sense, that there’s a broader questioning of whether that makes sense. Because, obviously, the internet and a lot of this utopian rhetoric around the internet emerges in the 90s, which is the same time that the Soviet Union is collapsing, the Cold War is officially ending. US hegemony is solid. As the internet rolls out around the world, the US tech companies come along with it, and dominate all of these sectors of the internet economy. That then bleed into so many other traditional sectors of what we’re used to having in our economies.

So, the idea is that we just need to allow this to freely happen, that we can’t restrict or regulate the internet, because that is restricting freedom and democracy and all these great things that America brings with it around the world. At the same time, then you had these US companies dominate so many sectors of European economies, Canadian economy, Australian economy, so many other countries around the world. And what the US said was like: You can’t stop this, because that’s against the international trading rules and against the free trade order and blah, blah, blah. And there were rules put in trade agreements that we couldn’t do these things, but that benefited the United States immensely. There was talk of like the open internet, but often that was US-dominated Internet where a lot of other people’s interests could not be accommodated there because the US had to dominate — or at least that’s how I feel about it.

Now, that the United States, and in particular, the dominance of US tech companies is being threatened, all of a sudden, the United States is going back on those same principles that it claimed to believe in and claim to be pushing on the rest of the world, where it is now going to ban Chinese tech companies, and it is going to restrict apps that are competing with its companies. I think it reaches the point where, on the one hand, okay, maybe that does work for US national security interests and whatnot. And to some degree, that’s a legitimate conversation to have, if we’re talking about what works best for the United States and their very narrow interests. But I think it also shows us that the rhetoric that they were using for so long, to sell this idea and dominance of their tech companies to the rest of the world, was always based on a fabrication. It was always not true to a certain degree. Now we’re seeing that, of course, naturally, it was always about US power. So, now that US power is threatened in certain ways, they’re going to change their actions to protect that power, because that was always what it was about, and not spreading freedom and democracy.

JS: We’re a long way from even Hillary Clinton State Department era of internet freedom stuff, which was always a bit of a cover, or a thin cover, for State Department and CIA activity overseas and democracy building. Just like that term was a little euphemistic. Again, I would argue that it seems untenable. What is our end goal here? Or what are we trying to contain? There are all kinds of economic protectionism. And you might do it because you want to protect American industry or jobs, which is a little bit more understandable, and that’s why we have domestic subsidies or tariffs or regulations, things like that. But it’s a different matter when it is couched in this nebulous national security strategy that is open-ended. So I would argue: What are we moving towards? Yes, we’re trying to preserve American dominance in some way. I say we very broadly. Obviously, I’m not a member of the government,

PM: Jacob Silverman, out on the front lines of American dominance.

JS: I’m revealing my CIA affiliation, or something. But no, it’s an attempt at preserving American dominance. But certainly, from the political left, we’d like to live in a multipolar world that’s just not dictated to, on any level, by the United States. There comes a point where, even from a view of American hegemony, it might be self-defeating because it causes countries in Europe, which are supposed to close allies, to not be able to innovate or develop their own tech industries as much as one perhaps might like. So, I’d like to actually mention a specific example or two. You have this company, ASML, which sometimes I’ve said on Twitter is probably the most important company in the world, that and TSMC, the a huge semiconductor manufacturer in Taiwan. Which we might go to war over one day. But ASML makes these machines that some people might know, that basically, they make the machines that allowed chip manufacturers to manufacture chip.

They’re these huge machines that take up a warehouse, cost hundreds of millions of dollars, take a month or two to assemble, I think, and they’re magic. Engineers go crazy over them as they should. But the US has been trying to limit their sales, especially to China. And because it’s a Dutch company, we can kind of push it around, but this seems a little ridiculous to me, especially when this company is really the only one in the world that can do something like this. I certainly understand from a realpolitik perspective why the US might try to do this. But you’re harming an ally in the Netherlands, who is actually an important intelligence ally, and you’re really holding back this company that could, perhaps in some more collective way, drive technological or human flourishing.

It’s similar with TSMC in Taiwan, this notion that we’ve allowed these companies to become so central, and to become actual choke points in the global supply chain. In this cold war, or trade war with China, that they become almost too important. ASML and TSMC are too important in a way. That is one reason why we need to build more chip fabs here in the US and why TSMC wants to build in Germany and other places, like South Korea. I think it will be cool to have more chip fabs. But we’ve backed ourselves into a corner and perhaps a more free trade embracing attitude towards the tech sector might really be better for everyone and to help us also dial down some diplomatic tensions and to use some of those empty industry terms — to create more innovation dynamism. One other quick example that I find amusing, I think it was last year, and there’s been some reporting on it recently, but there have been a few reports. It was it was either a Huawei or Xiaomi created a phone. Perhaps you know which one, but they released a phone that created a panic in the US national security establishment. Do you know which company this was?

PM: I think it was the Mate 60, Huawei?

JS: Yes, that’s right. It used the three nanometer chip manufacturing, thanks to companies like ASML. But anyway made the tiny chips, or was able to manufacture transistors at the nanometer level. That really alarmed Western security experts, because they thought China wasn’t really capable of doing this or that they had prep, basically put a lid on all that, through sanctions and limiting sales of companies like ASML. In a way, it’s kind of funny, China released a sick phone and the Western security establishment goes crazy. Of course, it’s really about these larger issues of technological prowess and industrial capacity. But to me in a way, it shows that we’ve gotten to a place that’s almost silly. We are not going to limit the manufactor or spread of advanced smartphones, especially if China’s has shown this capacity to produce its own. So where are we going to go from here? Are we going to keep fighting this kind of rear guard, quasi-militaristic action, of trying to close the barn door after the horse is already out?

Or are we going to figure out a way that is more cooperative that perhaps is more diplomatic. That has the potential to increase wealth and flourishing and even just basic research for everyone, we’ve become so set in this cold war with China that the US Defense space and even a lot of us tech companies aren’t necessarily prepared to think in those other ways. And this does, this does cut both way. China in recent years, somewhat in response, perhaps to US actions, but they’ve been arresting a lot of people, they’ve been cracking down on the business intelligence industry, which has different terms for it sometimes. But basically is, investigating and spying on companies to see whether they’re worth doing business with. It’s a flourishing industry globally, but in China, it gets into some darker places that the Chinese government doesn’t want Westerners looking at. Especially because some of these business intelligence firms, or these due diligence firms, employ former spies. So there’s a lot going on here. And China has a lot to account for also, but I would think it’s possible dial down the temperature, and eventually it create a more prosperous world. But we’ve really gone down this unhelpful path.

PM: But that wouldn’t work well for Silicon Valley’s market share, so we certainly couldn’t do that. You would hope in another world, we would be able to think that way. But unfortunately, a lot of our leaders seem to be determined not to. Just as final points, I would say that I’m still skeptical that the TikTok ban will go through. I kind of hope it doesn’t because I think that it signals are really bad direction for policymaking to be headed in. If you really want to address these stated problems around data use, data capture, the potential ability for China to access this data and stuff. I think you would want to see a whole different set of regulations that are focused on how all of these companies are doing this, not just the Chinese one. As someone in Canada, I don’t want TikTok taking my data; I also don’t want Facebook taking my data. Why should I be more comfortable with a US company doing that? That just doesn’t go for the US government, but what the Canadian government might look to do as well, if the US moves forward on this.

I think more broadly, I would hope that seeing the United States move forward with these actions is a bit of a wake up call for other countries, particularly countries that consider it its allies. Do we really just want to be continually dominated by us tech companies? Or is it time to reject this binary of US tech versus Chinese tech, and think beyond that as to how there are better International and even national tech industries developed in competition to that. Obviously, we see Europe moving forward with that to a certain degree, but often, that’s just how do we have our own tech monopolies as well? Which is potentially not the best approach to that, or at least the approach that provides social benefits that we would hope to see. What are you thinking about where this TikTok ban might go? Or just more broadly on the focus of US tech policy in this frame of US versus China?

JS: I think you put it really well. There are systemic issues and business practices and privacy, and even national security concerns, that should not be addressed with bills that are designed to target one company and then be invoked whenever the president decides to in the future. These are business practices and issues of public concern that can be addressed much more broadly and sustainably, with legislation that probably, again, is already written and on Ron Wyden’s hard drive. I also just finally think that it’s a waste of time and political energy and political capital is finite. Especially when our concerns are so pressing, whether you want Biden to win this fall or not, there’s only so much the US government can do and often it’s very little.

To spend political capital, as people say, on this and to do it by cooperating with some of the worst Republican actors there are, at a time when the Republican Party is supposedly a threat to democracy, I just think it’s really ill-advised and really sloppy and careless from political perspective. I don’t really know why they’re doing this or why they’re doing this now. So I think it’s wrong on strategy and wrong on the timing too. I hope we’re talking about something else in a couple weeks. I think this will go on for a while. Obviously, TikTok deserves our attention, our study and our concern, and people like Jeffrey Yass do too. But in terms of what’s needed right now in this in this political moment? I don’t think it is TikTok. I think it’s some of the data privacy issues perhaps surrounding it, but to do that would mean to take a look at the entire US tech industry, which people here do not want.

PM: Jacob, always fantastic to speak with you. Thanks so much for taking the time as always, thanks.

JS: It was fun. Thank you.