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The Supreme Court heard arguments Wednesday in a case that will help determine whether social media platforms can be held liable for aiding and abetting terrorism for failing to remove content and accounts promoting it.

The arguments in Twitter v. Taamneh follow those in a case with similar facts, Gonzalez v. Google, that explores whether tech platforms can be held responsible for promoting terrorist posts through their recommendation algorithms. In that case, the justices seemed reluctant to overhaul the key legal liability shield in question, Section 230 of the Communications Decency Act, which protects platforms from being held accountable for hosting their users’ posts. While many appeared sympathetic to a narrower reading of the law, several also seemed to prefer kicking the responsibility over to Congress.

In Wednesday’s case, such a consensus was more elusive, as justices tested a variety of hypotheticals on lawyers for either side as well as a representative for the U.S. government, which generally argued in favor of Twitter. U.S. Deputy Solicitor General Edwin Kneedler represented the U.S. government.

The question in the case is whether Twitter can be held accountable for aiding and abetting a specific international terrorist act because it did not take more aggressive action against terrorist content on its service, given that it generally works to moderate and remove terrorist content under its policies.

Twitter’s lawyer Seth Waxman argued that the company should not be held responsible for aiding and abetting terrorism in instances where it is not directly aware of the specific post or account in question. He said that to satisfy the anti-terrorism law’s standard for liability, Twitter would have had to provide substantial assistance to the act of terrorism and know their actions would provide such assistance.

Waxman tried to draw a distinction between an open and widely used service like Twitter and a bank that provides money to a terrorist, given Know Your Customer laws that would require a bank to collect more information before providing its services, creating a greater level of knowledge than Twitter would have.

Justice Samuel Alito said he could see two different arguments for how Twitter could win, but it’s difficult to say in each where to draw the line. The first argument would be that Twitter did not know its services would be used to carry out a specific attack and the second would be that Twitter didn’t substantially assist in the attack.

Justice Sonia Sotomayor noted that basing a win for Twitter on the knowing standard would be difficult “because willful blindness is something we have said can constitute knowledge.”

Justice Elena Kagan at one point asked Waxman whether Twitter could be held liable if it actually didn’t enforce any policy against terrorist content on its site. Waxman said he doesn’t think it could unless it also provided “affirmative assistance” to the terrorists.

Kagan seemed to disagree with that interpretation, saying it would be obvious in that scenario that Twitter was providing substantial assistance to terrorist activity, asking, “how could it be otherwise?”

Justice Amy Coney Barrett laid out a possible framework for a ruling in favor of Twitter in her questioning of Kneedler. Coney Barrett said such an opinion might say that in order to find Twitter liable for aiding and abetting the terrorist act, the complaint would have to prove that Twitter’s service was directly used toward the terrorist attack, not just general recruitment or radicalizing.

Coney Barrett also hypothesized that the justices could say there needs to be an allegation of specific knowledge of a terrorist act in order to find a service that’s “open to all comers” liable.

Kneedler said it would be important to clarify that some businesses that are theoretically open to all, like banks, would have a more “individualized encounter” with their consumers in the course of doing business, granting them more knowledge than a platform like Twitter.

Eric Schnapper, the attorney for Taamneh, conceded that they were not alleging specific ways Twitter was used to carry out the terrorist attack, but rather general recruitment. Justice Ketanji Brown Jackson asked if it would be illegal to sell Osama bin Laden a phone without knowing it would be used for a terrorist specific terrorist act.

Schnapper said it would not be necessary to prove the phone was used for a specific terrorist act, because it “aids the terrorist enterprise.” He later conceded that alleging bin Laden did in fact use the phone to further his terrorist activity “would be the better way to plea it.” Still, he said, the potential terrorist actions “would be fairly implicit in his name,” he said.

The Supreme Court is expected to make a decision on the case by June.

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WATCH: Why the Supreme Court’s Section 230 case could reshape the internet

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How TikTok’s rise sparked a short-form video race

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How TikTok’s rise sparked a short-form video race

TikTok’s grip on the short-form video market is tightening, and the world’s biggest tech platforms are racing to catch up.

Since launching globally in 2016, ByteDance-owned TikTok has amassed over 1.12 billion monthly active users worldwide, according to Backlinko. American users spend an average of 108 minutes per day on the app, according to Apptoptia.

TikTok’s success has reshaped the social media landscape, forcing competitors like Meta and Google to pivot their strategies around short-form video. But so far, experts say that none have matched TikTok’s algorithmic precision.

“It is the center of the internet for young people,” said Jasmine Enberg, vice president and principal analyst at Emarketer. “It’s where they go for entertainment, news, trends, even shopping. TikTok sets the tone for everyone else.”

Platforms like Meta‘s Instagram Reels and Google’s YouTube Shorts have expanded aggressively, launching new features, creator tools and even considering separate apps just to compete. Microsoft-owned LinkedIn, traditionally a professional networking site, is the latest to experiment with TikTok-style feeds. But with TikTok continuing to evolve, adding features like e-commerce integrations and longer videos, the question remains whether rivals can keep up.

“I’m scrolling every single day. I doom scroll all the time,” said TikTok content creator Alyssa McKay.

But there may a dark side to this growth.

As short-form content consumption soars, experts warn about shrinking attention spans and rising mental-health concerns, particularly among younger users. Researchers like Dr. Yann Poncin, associate professor at the Child Study Center at Yale University, point to disrupted sleep patterns and increased anxiety levels tied to endless scrolling habits.

“Infinite scrolling and short-form video are designed to capture your attention in short bursts,” Dr. Poncin said. “In the past, entertainment was about taking you on a journey through a show or story. Now, it’s about locking you in for just a few seconds, just enough to feed you the next thing the algorithm knows you’ll like.”

Despite sky-high engagement, monetizing short videos remains an uphill battle. Unlike long-form YouTube content, where ads can be inserted throughout, short clips offer limited space for advertisers. Creators, too, are feeling the squeeze.

“It’s never been easier to go viral,” said Enberg. “But it’s never been harder to turn that virality into a sustainable business.”

Last year, TikTok generated an estimated $23.6 billion in ad revenues, according to Oberlo, but even with this growth, many creators still make just a few dollars per million views. YouTube Shorts pays roughly four cents per 1,000 views, which is less than its long-form counterpart. Meanwhile, Instagram has leaned into brand partnerships and emerging tools like “Trial Reels,” which allow creators to experiment with content by initially sharing videos only with non-followers, giving them a low-risk way to test new formats or ideas before deciding whether to share with their full audience. But Meta told CNBC that monetizing Reels remains a work in progress.

While lawmakers scrutinize TikTok’s Chinese ownership and explore potential bans, competitors see a window of opportunity. Meta and YouTube are poised to capture up to 50% of reallocated ad dollars if TikTok faces restrictions in the U.S., according to eMarketer.

Watch the video to understand how TikTok’s rise sparked a short form video race.

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Elon Musk’s xAI Holdings in talks to raise $20 billion, Bloomberg News reports

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Elon Musk's xAI Holdings in talks to raise  billion, Bloomberg News reports

The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)

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Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.

The funding would value the company at over $120 billion, according to the report.

Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.

The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.

Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.

Faber Report: Elon Musk held call with current xAI investors, sources say

The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.

“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”

Read the full Bloomberg story here.

— CNBC’s Samantha Subin contributed to this report.

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Alphabet jumps 3% as search, advertising units show resilient growth

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Alphabet jumps 3% as search, advertising units show resilient growth

Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.

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Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.

GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”

The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.

Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.

Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.

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Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.

During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.

Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.

Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.

Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.

“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.

WATCH: Gemini delivering well for Google, says Check Capital’s Chris Ballard

Gemini delivering well for Google, says Check Capital's Chris Ballard

CNBC’s Jennifer Elias contributed to this report.

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