The geopolitics of TikTok

Recent estimates indicate that TikTok boasts approximately 80 million monthly active users (MAUs) in the United States alone.

Among these users, there's a demographic breakdown of 60% female and 40% male. Notably, 60% of the MAUs fall within the age bracket of 16-24, amounting to 48 million users, while 26% are aged between 25-44, totaling 21 million users.

TikTok's user base predominantly consists of the youth and those aspiring to capture a youthful vibe.

Interestingly, TikTok is under the umbrella of the Chinese internet company ByteDance.

Washington seeks to exert more influence and oversight over how TikTok engages with American users.

During the Trump administration, there was a significant move to ban the app within 45 days. However, the decision was later reconsidered, shifting towards advocating for the sale of TikTok to a US buyer, with the expectation of the US receiving a substantial share of the sale proceeds.

TikTok's leadership geared up to sell its technology to a reputable American corporation but encountered resistance from Chinese Communist Party officials who opposed any such takeover, leading to complications and regulatory hurdles.

The conflict surrounding TikTok has evolved into a major standoff between two global powers, with billions of dollars at stake, potentially shaping cultural and entertainment trends for generations to come.

For the Biden administration, TikTok serves as a significant test case for regulating popular technology while managing the intricacies of the US-China commercial relationship.

TikTok is not just another social media platform; it's akin to handheld television on steroids, offering access to a myriad of global content creators via hyper-personalized channels.

With its AI-driven recommendation engine, TikTok delivers content tailored to individual preferences and quirks. Experts like Kevin Munger from Penn State University note that snappy videos are more efficient at communicating information than traditional text-based content.

Given its television-like nature, there's a growing call for TikTok to be regulated similarly to traditional television under the Communications Act of 1934, although amendments would be necessary to adapt to the digital landscape.

Furthermore, various nations, from Canada to China, have implemented regulations governing television and communications, underscoring the need for similar oversight in the realm of platforms like TikTok.

Last week, a House committee passed legislation that bill that would give TikTok an ultimatum: Break up with the Chinese Communist Party or break up with the US.

Officials from the FBI, Justice Department, and Office of the Director of National Intelligence will brief all House lawmakers on TikTok on Tuesday at 1:00 p.m. ET.

Maeve Sheehey from Bloomberg is reporting that the House is planning to vote Wednesday on the TikTok bill.

Enjoy the ride and plan accordingly.

-Marc

Sound More Interesting at Cocktails Memo | March 8, 2024

25 talking points for better conversation at cocktails from news of the past week.

1. Sweden enters NATO.

2. France signs defense deal with Moldova amid Russian threats.

3. Russia says it is working with China on a lunar nuclear power plant by 2035.

4. UK votes: Labour continues to hold a dominant lead over the Tories, polling 44 percent to the government's 27 percent in the latest Savanta voting intention.

5. EU will ban single-use plastic packaging in cafes starting in 2030.

6. The juntas in Niger, Mali + Burkina Faso agreed to form a joint force to fight jihadist militias.

7. Crypto super PACs have spent over $13 million to influence primary races in California, Texas, Alabama, and North Carolina.

8. House panel unanimously approved a bill that could ban TikTok.

9. Alibaba is leading a financing round of at least $600 million for Chinese AI startup MiniMax.

10. Ex-Google engineer charged with AI tech theft for Chinese firms.

11. Temasek Holdings is in discussions about investing in Microsoft-backed artificial intelligence company OpenAI.

12. Research shows survey participants duped by AI-generated images nearly 40% of the time.

13. 450%: The amount by which Nvidia's share price has surged since January 2023.

14. SpaceX eyes March 14 for its next Starship test launch.

15. NASA is seeking new astronaut candidates for the first time in four years.

16. JetBlue Airlines + Spirit Airlines called off a $3.8bn merger.

17. Today is the 10th anniversary of the disappearance of Malaysia Airlines MH370.

18. Athletic Brewing Company has become the leading nonalcoholic beer brand in US grocery stores.

19. TalkTV will reportedly cease running as a linear TV channel and will broadcast solely on YouTube.

20. Riken Yamamoto wins the 2024 Pritzker architecture prize.

21. Noma will stay open until Spring 2025.

22. Jimmy Kimmel is hosting the Oscars.

23. The Dartmouth College men's basketball team voted to unionize with the Service Employees International Union, becoming the nation's first group of student-athletes to organize.

24. Caitlin Clark announces she will enter this spring's WNBA draft.

25. ATP Tour announces Saudi Arabia' strategic partnership.'

Enjoy the ride + plan accordingly.

-Marc

Building generative AI in China

Regarding generative AI, Chinese tech companies with the capability to build advanced models are encountering a multifaceted dilemma.

Chinese tech companies rely almost entirely on underlying AI models from the United States.

China lags behind the United States in generative AI by at least a year and may need many years to catch up and surpass America's Big Tech.

Even as the United States has tried to slow China's tech computing advancements by limiting the sale of microchips and curbing investments, the US government has not restricted allowing America's Big Tech from openly releasing open-source AI software globally to encourage its adoption.

"When Chinese companies are leveraging American open-source technologies to play catch-up, the questions become very complicated — wrapped up in issues of national security and geopolitics," according to Oren Etzioni, a University of Washington professor specializing in AI.

This challenge is further compounded by evolving regulations in China that shape how AI models are trained and deployed. As the Chinese tech industry grapples with these complexities, leaders find themselves at a crossroads, balancing innovation with regulatory compliance.

For one, the inherent unpredictability of generative AI models poses a significant hurdle for Chinese tech giants.

The fear of unintended consequences, where a chatbot might express inappropriate or problematic content, looms large, like saying how horrible the Chinese Communist Party is, for example. In a New York Times article, Andrew Ng, a computer science professor at Stanford and former Baidu executive, acknowledges the difficulty in eliminating these issues, highlighting the intricate nature of managing the expressions of AI systems.

Chinese tech giants are also navigating a regulatory landscape that is continually evolving. New regulations impose constraints on the data sets for training AI models, dictate acceptable applications, and require government registration of AI models.

The pressure for quick returns on AI investments in China has led to a shift in focus.

Chinese tech investors prioritize easily executable applications over more ambitious projects centered on fundamental research. Notably, up to 50 percent of China's AI investment is in computer vision technology, crucial for surveillance purposes, rather than laying the groundwork for generative AI models.

As Chinese tech companies grapple with the complexities of generative AI, finding the right balance between innovation and Chinese Communist Party compliance will dampen their ability to scale in this environment.

Enjoy the ride + plan accordingly.

-Marc