Connect with us

Published

on

Shou Zi Chew, chief executive officer of TikTok Inc., speaks during the Bloomberg New Economy Forum in Singapore, on Wednesday, Nov. 16, 2022.

Bryan van der Beek | Bloomberg | Getty Images

TikTok CEO Shou Zi Chew will face a tough crowd on Thursday when he testifies before the House Energy and Commerce Committee while his company is on the brink of a potential ban in the U.S.

Although TikTok is the one in the hot seat on Thursday, the hearing will also raise existential questions for the U.S. government regarding how it regulates technology. Lawmakers recognize that the concerns over broad data collection and the ability to influence what information consumers see extend far beyond TikTok alone. U.S. tech platforms including Meta’s Facebook and Instagram, Google’s YouTube, Twitter and Snap’s Snapchat have raised similar fears for lawmakers and users.

That means that while trying to understand whether TikTok can effectively protect U.S. consumers under a Chinese owner, lawmakers will also have to grapple with how best to address consumer harms across the industry.

Conversations with lawmakers, congressional aides and outside experts ahead of the hearing reveal the difficult line the government needs to walk to protect U.S. national security while avoiding excessive action against a single app and violating First Amendment rights.

Evaluating a potential ban

There’s little appetite in Washington to accept the potential risks that TikTok’s ownership by Chinese company ByteDance poses to U.S. national security. Congress has already banned the app on government devices and some states have made similar moves.

The interagency panel tasked with reviewing national security risks stemming from ByteDance’s ownership has threatened a ban if the company won’t sell its stake in the app.

Still, an outright ban raises its own concerns, potentially missing the forest for the trees.

“If members focus solely on the prospect of a ban or a forced sale without addressing some of the more pervasive issues, particularly those facing children and younger users, shared by TikTok and U.S.-based social media companies, I think that would be a mistake,” Rep. Lori Trahan, D-Mass., a committee member, told CNBC in an interview on Tuesday. Trahan said members should ask about national security risks of the app, but those questions should be substantive.

A TikTok advertisement at Union Station in Washington, DC, US, on Wednesday, March 22, 2023. 

Nathan Howard | Bloomberg | Getty Images

Rep. Gus Bilirakis, R-Fla., who chairs the E&C subcommittee on innovation, data and commerce, said he and many of his colleagues are going into the hearing open to solutions.

“We have to be open-minded and deliberate,” Bilirakis told CNBC in an interview on Wednesday. “But at the same time, time is of the essence.”

If the government moves for a ban where the concerns could reasonably be mitigated with a less restrictive measure, it could pose First Amendment issues, according to Jameel Jaffer, executive director of the Knight First Amendment Institute at Columbia University.

“A ban here is in some ways under-inclusive because it would be focused just on TikTok or a small number of platforms, when in fact many other platforms are collecting this kind of information as well,” Jaffer said. “And in other ways, it would be over-broad because there are less restrictive ways that the government could achieve its ends.”

While some might wonder if cutting off Americans’ access to TikTok is really such a violation of rights, Jaffer said the public should consider it in terms of the U.S. government’s authority to decide which media Americans can access.

“It’s a good thing that if the government wants to ban Americans from accessing foreign media, including foreign social media… it has to carry a heavy burden in court,” Jaffer said.

Many lawmakers agree that the government should make its case more clearly to the American public for why a ban is necessary, should it go that route. The bipartisan RESTRICT Act recently introduced in the Senate, for example, would require such an explanation, to the extent possible, when the government wants to limit foreign-owned technology for national security reasons.

Trahan said she could support legislation similar to the RESTRICT Act in the House, which would create a process to mitigate national security risks of technologies from foreign adversary countries, but passing such a bill would still not be enough.

“The message that I want folks to hear is that we cannot afford to pass this legislation or something like it, watch the administration ban or force the sale of TikTok and declare victory in the fight to rein in the abuses of dominant Big Tech companies,” Trahan said. “I think the conversation right now about a ban certainly threatens to let Big Tech companies off the hook, and it’s on Congress not to fall into that trap.”

Even if the U.S. successfully banned TikTok or forced it to spin off from ByteDance, there’s no way to know for sure that any earlier-collected data is out of reach of the Chinese government.

“If that divestment would occur, how do you segregate the code bases between ByteDance and TikTok?” asked John Lash, who advises clients on risk mitigation agreements with the Committee on Foreign Investment in the U.S. (CFIUS) but hasn’t worked for TikTok or ByteDance. “And how is the U.S. government going to get comfortable that the asset, TikTok, which is hypothetically sold, is free of any type of backdoor that was either maliciously inserted or just weaknesses in code, errors that occur regularly in how code is structured?”

“I think the concern is valid. My big issue is that genie’s sort of out of the bottle,” Eric Cole, a cybersecurity consultant who began his career as a hacker for the Central Intelligence Agency, said of the data security fears. “At this point, it’s so embedded that even if they were successful in banning Tiktok altogether, that the damage is done.”

Addressing industry-wide concerns

Thursday’s hearing will feature several lawmakers on both sides of the aisle calling for comprehensive privacy reform, like the kind the panel passed last year but never made it to the floor for a vote.

Those calls serve as recognition that many of the concerns about TikTok, apart from its ownership by a Chinese company, are shared by other prominent tech platforms headquartered in the U.S.

Both Trahan and Bilirakis mentioned the need for privacy reform as a more systemic solution to the issues raised by TikTok. Both are especially concerned about the social media company’s potentially harmful impacts on children and said they would drill down on TikTok’s protections in the hearing.

TikTok has touted a complex plan known as Project Texas to help ease U.S. concerns over its ownership. Under the plan, it will base its U.S. data operations domestically and allow its code to be reviewed and sent to the app stores by outside parties.

A TikTok advertisement at Union Station in Washington, DC, US, on Wednesday, March 22, 2023. 

Nathan Howard | Bloomberg | Getty Images

Chew plans to tell Congress that he strongly prioritizes the safety of users, and particularly teens, that TikTok will firewall U.S. user data from “unauthorized foreign access,” it “will not be manipulated by any government” and it will be transparent and allow independent monitors to assess its compliance.

Experts and even some lawmakers acknowledge that Project Texas offers a step forward on some aspects of consumer protection they’ve pushed for in the tech industry more broadly.

“TikTok is in a really unique position right now to take some positive steps on issues that a lot of top American companies have fallen behind and frankly even regressed on whether it’s protecting kids or embracing transparency,” Trahan said. While she believes there are still many questions TikTok needs to answer about the adequacy of Project Texas, Trahan said she is “hopeful” about the company’s professed “openness to stronger transparency mechanisms.”

Lawmakers and aides who spoke with CNBC ahead of the hearing emphasized that comprehensive privacy legislation will be necessary regardless of what action is taken against TikTok in particular. That’s how a similar situation in the future may be prevented, and a way to hold U.S. companies to higher standards as well.

But given federal digital privacy protections don’t currently exist, Lash said the U.S. should consider what it would mean if Project Texas were to go away.

“In lieu of comprehensive federal data privacy regulation in the United States, which is needed, does Project Texas give the best available option right now to protect national security?” asked Lash, whose advisory is one of a small group of firms with the expertise to advise the company on an agreement should a deal go through. “And does it continue if ByteDance is forced to divest their interests?”

The plan appears to address the issues that lawmakers are concerned about, said Lash, but what it can’t address are “the theoretical risks around may happen, could happen as it relates to the application.”

“I would say, based on what I’ve seen out in the public, it does seem to comprehensively address a lot of the real technical risks that may be arising,” he said.

Still, policymakers appear skeptical that Project Texas reaches that bar.

An aide for the House Energy and Commerce Committee who was only authorized to speak on background told reporters earlier this week that TikTok’s risk mitigation plans were “purely marketing.” Another aide for the committee noted that even if the U.S. can be assured the data is secure, it’s impossible to comb through all the existing code for vulnerabilities.

E&C Chair Cathy McMorris Rodgers, R-Wash., supports a ban to address the immediate risks TikTok poses as well as comprehensive privacy legislation that passed through the committee last Congress to prevent repeat situations, according to E&C aides.

TikTok’s strategy

Rep. Jamaal Bowman (D-NY) speaks at a news conference outside the U.S. Capitol Building on February 02, 2023 in Washington, DC.

Anna Moneymaker | Getty Images

On Wednesday, Bowman held a press conference with dozens of creators, opposing the ban and saying rhetoric around the app is a sort of “red scare” pushed primarily by Republicans. He said he supports comprehensive legislation addressing privacy issues across the industry, rather than singling out one platform. Bowman noted lawmakers haven’t received a bipartisan congressional briefing from the administration on national security risks stemming from TikTok.

“Let’s not have a dishonest conversation,” Bowman said. “Let’s not be racist toward China and express our xenophobia when it comes to TikTok. Because American companies have done tremendous harm to American people.”

Reps. Mark Pocan, D-Wisc., and Robert Garcia, D-Calif., joined Bowman and the creators, announcing their opposition to a ban. Garcia, who is openly gay, said it’s important that young queer creators “are able to find themselves in this space, share information and feel comfortable, in some cases come out.”

“Honestly it’s done best on the TikTok platform than any other social media platform that currently exists, certainly in the United States,” Garcia said.

Creators at the event on Wednesday shared the opportunities that TikTok has afforded them that aren’t available in the same way on other apps. Several creators who spoke with CNBC said they have other social media channels but have far fewer followers on them, due in part to the easy discoverability built into TikTok’s design.

“I’ve been on social media for probably ten years,” said David Ma, a Brooklyn-based content creator, director and filmmaker on TikTok. But it wasn’t until he joined TikTok that his following grew exponentially, to more than 1 million people. “It’s given me visibility with people that are going to fundamentally change the trajectory of my career.”

Tim Martin, a college football coach in North Dakota who posts about sports on TikTok to a following of 1 million users, estimated 70% of his income comes from the app. Martin credits the TikTok algorithm with getting his videos in front of users who truly care about what he has to share, which has helped him grow his following there far more than on Instagram.

But TikTok’s attempt to shift the narrative to positive stories from creators and users may still fall flat for some lawmakers.

Bilirakis said the strategy is “not resonating with our colleagues. Definitely not with me.” That’s because he hears other anecdotes about constituents’ encounters with the app that make him worry for teens’ safety.

“I do think there’s a chance that it may not necessarily have the impact that TikTok is looking for,” said Jasmine Enberg, a social media analyst for Insider Intelligence. “It’s more evidence of how firmly entrenched the app is in the digital lives of Americans, which isn’t necessarily going to help convince us lawmakers that TikTok can’t be used or isn’t being used to influence public opinion.”

Subscribe to CNBC on YouTube.

WATCH: TikTok influencer weighs in on possible ban

TikTok influencer weighs in on possible ban

Continue Reading

Technology

USDC stablecoin issuer Circle files for IPO as public markets open to crypto

Published

on

By

USDC stablecoin issuer Circle files for IPO as public markets open to crypto

Jeremy Allaire, Co-Founder and CEO, Circle 

David A. Grogan | CNBC

Circle, the company behind the USDC stablecoin, has filed for an initial public offering with the U.S. Securities and Exchange Commission.

The S1 lays the groundwork for Circle’s long-anticipated entry into the public markets.

While the filing does not yet disclose the number of shares or a price range, sources told Fortune that Circle plans to move forward with a public filing in late April and is targeting a market debut as early as June.

JPMorgan Chase and Citi are reportedly serving as lead underwriters, and the company is seeking a valuation between $4 billion and $5 billion, according to Fortune.

This marks Circle’s second attempt at going public. A prior SPAC merger with Concord Acquisition Corp collapsed in late 2022 amid regulatory challenges. Since then, Circle has made strategic moves to position itself closer to the heart of global finance — including the announcement last year that it would relocate its headquarters from Boston to One World Trade Center in New York City.

Read more about tech and crypto from CNBC Pro

Circle is best known as the issuer of USDC, the world’s second-largest stablecoin by market capitalization.

Pegged one-to-one to the U.S. dollar and backed by cash and short-term Treasury securities, USDC has roughly $60 billion in circulation.

Circle is best known as the issuer of USDC, the world’s second-largest stablecoin by market capitalization.

Pegged one-to-one to the U.S. dollar and backed by cash and short-term Treasury securities, USDC has roughly $60 billion in circulation. It makes up about 26% of the total market cap for stablecoins, behind Tether‘s 67% dominance. Its market cap has grown 36% this year, however, compared with Tether’s 5% growth.

Coinbase CEO Brian Armstrong said on the company’s most recent earnings call that it has a “stretch goal to make USDC the number 1 stablecoin.” 

The company’s push into public markets reflects a broader moment for the crypto industry, which is navigating renewed political favor under a more crypto-friendly U.S. administration. The stablecoin sector is ramping up as the industry grows increasingly confident that the crypto market will get its first piece of U.S. legislation passed and implemented this year, focusing on stablecoins.

Stablecoins’ growth could have investment implications for crypto exchanges like Robinhood and Coinbase as they integrate more of them into crypto trading and cross-border transfers. Coinbase also has an agreement with Circle to share 50% of the revenue of its USDC stablecoin.

The stablecoin market has grown about 11% so far this year and about 47% in the past year, and has become a “systemically important” part of the crypto market, according to Bernstein. Historically, digital assets in this sector have been used for trading and as collateral in decentralized finance (DeFi), and crypto investors watch them closely for evidence of demand, liquidity and activity in the market.

More recently, however, rhetoric around stablecoins’ ability to help preserve U.S. dollar dominance – by exporting dollar utility internationally and ensuring demand for U.S. government debt, which backs nearly all dollar-denominated stablecoins – has grown louder.

A successful IPO would make Circle one of the most prominent crypto-native firms to list on a U.S. exchange — an important signal for both investors and regulators as digital assets become more entwined with the traditional financial system.

Continue Reading

Technology

Hims & Hers shares rise as company adds new weight-loss medications to platform

Published

on

By

Hims & Hers shares rise as company adds new weight-loss medications to platform

The Hims app arranged on a smartphone in New York on Feb. 12, 2025.

Gabby Jones | Bloomberg | Getty Images

Hims & Hers Health shares closed up 5% on Tuesday after the company announced patients can access Eli Lilly‘s weight loss medication Zepbound and diabetes drug Mounjaro, as well as the generic injection liraglutide, through its platform.

Zepbound, Mounjaro and liraglutide are part of the class of weight loss medications called GLP-1s, which have exploded in popularity in recent years. Hims & Hers launched a weight loss program in late 2023, but its GLP-1 offerings have evolved as the company has contended with a volatile supply and regulatory environment.

Lilly’s weekly injections Zepbound and Mounjaro will cost patients $1,899 a month, according to the Hims & Hers website. The generic liraglutide will cost $299 a month, but it requires a daily injection and can be less effective than other GLP-1 medications.

“As we look ahead, we plan to continue to expand our weight loss offering to deliver an even more holistic, personalized experience,” Dr. Craig Primack, senior vice president of weight loss at Hims & Hers, wrote in a blog post.

A Lilly spokesperson said in a statement that the company has “no affiliation” with Hims & Hers and noted that Zepbound is available at lower costs for people who are insured for the product or for those who buy directly from the company. 

In May, Hims & Hers started prescribing compounded semaglutide, the active ingredient in Novo Nordisk‘s GLP-1 weight loss medications Ozempic and Wegovy. The offering was immensely popular and helped generate more than $225 million in revenue for the company in 2024.

But compounded drugs can traditionally only be mass produced when the branded medications treatments are in shortage. The U.S. Food and Drug Administration announced in February that the shortage of semaglutide injections products had been resolved.

That meant Hims & Hers had to largely stop offering the compounded medications, though some consumers may still be able to access personalized doses if it’s clinically applicable. 

During the company’s quarterly call with investors in February, Hims & Hers said its weight loss offerings will primarily consist of its oral medications and liraglutide. The company said it expects its weight loss offerings to generate at least $725 million in annual revenue, excluding contributions from compounded semaglutide.

But the company is still lobbying for compounded medications. A pop up on Hims & Hers’ website, which was viewed by CNBC, encourages users to “use your voice” and urge Congress and the FDA to preserve access to compounded treatments.

With Tuesday’s rally, Hims and Hers shares are up about 27% in 2025 after soaring 172% last year.

WATCH: Hims & Hers shares tumble over concerns around weight-loss business

Hims & Hers shares tumble over concerns around weight-loss business

Continue Reading

Technology

Meta’s head of AI research announces departure

Published

on

By

Meta's head of AI research announces departure

Meta CEO Mark Zuckerberg holds a smartphone as he makes a keynote speech at the Meta Connect annual event at the company’s headquarters in Menlo Park, California, on Sept. 25, 2024.

Manuel Orbegozo | Reuters

Meta’s head of artificial intelligence research announced Tuesday that she will be leaving the company. 

Joelle Pineau, the company’s vice president of AI research, announced her departure in a LinkedIn post, saying her last day at the social media company will be May 30. 

Her departure comes at a challenging time for Meta. CEO Mark Zuckerberg has made AI a top priority, investing billions of dollars in an effort to become the market leader ahead of rivals like OpenAI and Google.

Zuckerberg has said that it is his goal for Meta to build an AI assistant with more than 1 billion users and artificial general intelligence, which is a term used to describe computers that can think and take actions comparable to humans.

“As the world undergoes significant change, as the race for AI accelerates, and as Meta prepares for its next chapter, it is time to create space for others to pursue the work,” Pineau wrote. “I will be cheering from the sidelines, knowing that you have all the ingredients needed to build the best AI systems in the world, and to responsibly bring them into the lives of billions of people.”

Vice President of AI Research and Head of FAIR at Meta Joelle Pineau attends a technology demonstration at the META research laboratory in Paris on February 7, 2025.

Stephane De Sakutin | AFP | Getty Images

Pineau was one of Meta’s top AI researchers and led the company’s fundamental AI research unit, or FAIR, since 2023. There, she oversaw the company’s cutting-edge computer science-related studies, some of which are eventually incorporated into the company’s core apps. 

She joined the company in 2017 to lead Meta’s Montreal AI research lab. Pineau is also a computer science professor at McGill University, where she is a co-director of its reasoning and learning lab.

Some of the projects Pineau helped oversee include Meta’s open-source Llama family of AI models and other technologies like the PyTorch software for AI developers.

Pineau’s departure announcement comes a few weeks ahead of Meta’s LlamaCon AI conference on April 29. There, the company is expected to detail its latest version of Llama. Meta Chief Product Officer Chris Cox, to whom Pineau reported to, said in March that Llama 4 will help power AI agents, the latest craze in generative AI. The company is also expected to announce a standalone app for its Meta AI chatbot, CNBC reported in February

“We thank Joelle for her leadership of FAIR,” a Meta spokesperson said in a statement. “She’s been an important voice for Open Source and helped push breakthroughs to advance our products and the science behind them.” 

Pineau did not reveal her next role but said she “will be taking some time to observe and to reflect, before jumping into a new adventure.”

WATCH: Meta awaits antitrust fine from EU

Meta awaits antitrust fine from EU

Continue Reading

Trending