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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.”

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WATCH: TikTok influencer weighs in on possible ban

TikTok influencer weighs in on possible ban

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Apple scores big victory with ‘F1,’ but AI is still a major problem in Cupertino

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Apple scores big victory with 'F1,' but AI is still a major problem in Cupertino

Formula One F1 – United States Grand Prix – Circuit of the Americas, Austin, Texas, U.S. – October 23, 2022 Tim Cook waves the chequered flag to the race winner Red Bull’s Max Verstappen 

Mike Segar | Reuters

Apple had two major launches last month. They couldn’t have been more different.

First, Apple revealed some of the artificial intelligence advancements it had been working on in the past year when it released developer versions of its operating systems to muted applause at its annual developer’s conference, WWDC. Then, at the end of the month, Apple hit the red carpet as its first true blockbuster movie, “F1,” debuted to over $155 million — and glowing reviews — in its first weekend.

While “F1” was a victory lap for Apple, highlighting the strength of its long-term outlook, the growth of its services business and its ability to tap into culture, Wall Street’s reaction to the company’s AI announcements at WWDC suggest there’s some trouble underneath the hood.

“F1” showed Apple at its best — in particular, its ability to invest in new, long-term projects. When Apple TV+ launched in 2019, it had only a handful of original shows and one movie, a film festival darling called “Hala” that didn’t even share its box office revenue.

Despite Apple TV+ being written off as a costly side-project, Apple stuck with its plan over the years, expanding its staff and operation in Culver City, California. That allowed the company to build up Hollywood connections, especially for TV shows, and build an entertainment track record. Now, an Apple Original can lead the box office on a summer weekend, the prime season for blockbuster films.

The success of “F1” also highlights Apple’s significant marketing machine and ability to get big-name talent to appear with its leadership. Apple pulled out all the stops to market the movie, including using its Wallet app to send a push notification with a discount for tickets to the film. To promote “F1,” Cook appeared with movie star Brad Pitt at an Apple store in New York and posted a video with actual F1 racer Lewis Hamilton, who was one of the film’s producers.

(L-R) Brad Pitt, Lewis Hamilton, Tim Cook, and Damson Idris attend the World Premiere of “F1: The Movie” in Times Square on June 16, 2025 in New York City.

Jamie Mccarthy | Getty Images Entertainment | Getty Images

Although Apple services chief Eddy Cue said in a recent interview that Apple needs the its film business to be profitable to “continue to do great things,” “F1” isn’t just about the bottom line for the company.

Apple’s Hollywood productions are perhaps the most prominent face of the company’s services business, a profit engine that has been an investor favorite since the iPhone maker started highlighting the division in 2016.

Films will only ever be a small fraction of the services unit, which also includes payments, iCloud subscriptions, magazine bundles, Apple Music, game bundles, warranties, fees related to digital payments and ad sales. Plus, even the biggest box office smashes would be small on Apple’s scale — the company does over $1 billion in sales on average every day.

But movies are the only services component that can get celebrities like Pitt or George Clooney to appear next to an Apple logo — and the success of “F1” means that Apple could do more big popcorn films in the future.

“Nothing breeds success or inspires future investment like a current success,” said Comscore senior media analyst Paul Dergarabedian.

But if “F1” is a sign that Apple’s services business is in full throttle, the company’s AI struggles are a “check engine” light that won’t turn off.

Replacing Siri’s engine

At WWDC last month, Wall Street was eager to hear about the company’s plans for Apple Intelligence, its suite of AI features that it first revealed in 2024. Apple Intelligence, which is a key tenet of the company’s hardware products, had a rollout marred by delays and underwhelming features.

Apple spent most of WWDC going over smaller machine learning features, but did not reveal what investors and consumers increasingly want: A sophisticated Siri that can converse fluidly and get stuff done, like making a restaurant reservation. In the age of OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Gemini, the expectation of AI assistants among consumers is growing beyond “Siri, how’s the weather?”

The company had previewed a significantly improved Siri in the summer of 2024, but earlier this year, those features were delayed to sometime in 2026. At WWDC, Apple didn’t offer any updates about the improved Siri beyond that the company was “continuing its work to deliver” the features in the “coming year.” Some observers reduced their expectations for Apple’s AI after the conference.

“Current expectations for Apple Intelligence to kickstart a super upgrade cycle are too high, in our view,” wrote Jefferies analysts this week.

Siri should be an example of how Apple’s ability to improve products and projects over the long-term makes it tough to compete with.

It beat nearly every other voice assistant to market when it first debuted on iPhones in 2011. Fourteen years later, Siri remains essentially the same one-off, rigid, question-and-answer system that struggles with open-ended questions and dates, even after the invention in recent years of sophisticated voice bots based on generative AI technology that can hold a conversation.

Apple’s strongest rivals, including Android parent Google, have done way more to integrate sophisticated AI assistants into their devices than Apple has. And Google doesn’t have the same reflex against collecting data and cloud processing as privacy-obsessed Apple.

Some analysts have said they believe Apple has a few years before the company’s lack of competitive AI features will start to show up in device sales, given the company’s large installed base and high customer loyalty. But Apple can’t get lapped before it re-enters the race, and its former design guru Jony Ive is now working on new hardware with OpenAI, ramping up the pressure in Cupertino.

“The three-year problem, which is within an investment time frame, is that Android is racing ahead,” Needham senior internet analyst Laura Martin said on CNBC this week.

Apple’s services success with projects like “F1” is an example of what the company can do when it sets clear goals in public and then executes them over extended time-frames.

Its AI strategy could use a similar long-term plan, as customers and investors wonder when Apple will fully embrace the technology that has captivated Silicon Valley.

Wall Street’s anxiety over Apple’s AI struggles was evident this week after Bloomberg reported that Apple was considering replacing Siri’s engine with Anthropic or OpenAI’s technology, as opposed to its own foundation models.

The move, if it were to happen, would contradict one of Apple’s most important strategies in the Cook era: Apple wants to own its core technologies, like the touchscreen, processor, modem and maps software, not buy them from suppliers.

Using external technology would be an admission that Apple Foundation Models aren’t good enough yet for what the company wants to do with Siri.

“They’ve fallen farther and farther behind, and they need to supercharge their generative AI efforts” Martin said. “They can’t do that internally.”

Apple might even pay billions for the use of Anthropic’s AI software, according to the Bloomberg report. If Apple were to pay for AI, it would be a reversal from current services deals, like the search deal with Alphabet where the Cupertino company gets paid $20 billion per year to push iPhone traffic to Google Search.

The company didn’t confirm the report and declined comment, but Wall Street welcomed the report and Apple shares rose.

In the world of AI in Silicon Valley, signing bonuses for the kinds of engineers that can develop new models can range up to $100 million, according to OpenAI CEO Sam Altman.

“I can’t see Apple doing that,” Martin said.

Earlier this week, Meta CEO Mark Zuckerberg sent a memo bragging about hiring 11 AI experts from companies such as OpenAI, Anthropic, and Google’s DeepMind. That came after Zuckerberg hired Scale AI CEO Alexandr Wang to lead a new AI division as part of a $14.3 billion deal.

Meta’s not the only company to spend hundreds of millions on AI celebrities to get them in the building. Google spent big to hire away the founders of Character.AI, Microsoft got its AI leader by striking a deal with Inflection and Amazon hired the executive team of Adept to bulk up its AI roster.

Apple, on the other hand, hasn’t announced any big AI hires in recent years. While Cook rubs shoulders with Pitt, the actual race may be passing Apple by.

WATCH: Jefferies upgrades Apple to ‘Hold’

Jefferies upgrades Apple to 'Hold'

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Musk backs Sen. Paul’s criticism of Trump’s megabill in first comment since it passed

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Musk backs Sen. Paul's criticism of Trump's megabill in first comment since it passed

Tesla CEO Elon Musk speaks alongside U.S. President Donald Trump to reporters in the Oval Office of the White House on May 30, 2025 in Washington, DC.

Kevin Dietsch | Getty Images

Tesla CEO Elon Musk, who bombarded President Donald Trump‘s signature spending bill for weeks, on Friday made his first comments since the legislation passed.

Musk backed a post on X by Sen. Rand Paul, R-Ky., who said the bill’s budget “explodes the deficit” and continues a pattern of “short-term politicking over long-term sustainability.”

The House of Representatives narrowly passed the One Big Beautiful Bill Act on Thursday, sending it to Trump to sign into law.

Paul and Musk have been vocal opponents of Trump’s tax and spending bill, and repeatedly called out the potential for the spending package to increase the national debt.

On Monday, Musk called it the “DEBT SLAVERY bill.”

The independent Congressional Budget Office has said the bill could add $3.4 trillion to the $36.2 trillion of U.S. debt over the next decade. The White House has labeled the agency as “partisan” and continuously refuted the CBO’s estimates.

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The bill includes trillions of dollars in tax cuts, increased spending for immigration enforcement and large cuts to funding for Medicaid and other programs.

It also cuts tax credits and support for solar and wind energy and electric vehicles, a particularly sore spot for Musk, who has several companies that benefit from the programs.

“I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” Trump wrote in a social media post in early June as the pair traded insults and threats.

Shares of Tesla plummeted as the feud intensified, with the company losing $152 billion in market cap on June 5 and putting the company below $1 trillion in value. The stock has largely rebounded since, but is still below where it was trading before the ruckus with Trump.

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Tesla one-month stock chart.

— CNBC’s Kevin Breuninger and Erin Doherty contributed to this article.

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Microsoft layoffs hit 830 workers in home state of Washington

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Microsoft layoffs hit 830 workers in home state of Washington

Microsoft CEO Satya Nadella speaks at the Axel Springer building in Berlin on Oct. 17, 2023. He received the annual Axel Springer Award.

Ben Kriemann | Getty Images

Among the thousands of Microsoft employees who lost their jobs in the cutbacks announced this week were 830 staffers in the company’s home state of Washington.

Nearly a dozen game design workers in the state were part of the layoffs, along with three audio designers, two mechanical engineers, one optical engineer and one lab technician, according to a document Microsoft submitted to Washington employment officials.

There were also five individual contributors and one manager at the Microsoft Research division in the cuts, as well as 10 lawyers and six hardware engineers, the document shows.

Microsoft announced plans on Wednesday to eliminate 9,000 jobs, as part of an effort to eliminate redundancy and to encourage employees to focus on more meaningful work by adopting new technologies, a person familiar with the matter told CNBC. The person asked not to be named while discussing private matters.

Scores of Microsoft salespeople and video game developers have since come forward on social media to announce their departure. In April, Microsoft said revenue from Xbox content and services grew 8%, trailing overall growth of 13%.

In sales, the company parted ways with 16 customer success account management staff members based in Washington, 28 in sales strategy enablement and another five in sales compensation. One Washington-based government affairs worker was also laid off.

Microsoft eliminated 17 jobs in cloud solution architecture in the state, according to the document. The company’s fastest revenue growth comes from Azure and other cloud services that customers buy based on usage.

CEO Satya Nadella has not publicly commented on the layoffs, and Microsoft didn’t immediately provide a comment about the cuts in Washington. On a conference call with analysts in April, Microsoft CFO Amy Hood said the company had a “focus on cost efficiencies” during the March quarter.

WATCH: Microsoft layoffs not performance-based, largely targeting middle managers

Microsoft layoffs not performance-based, largely targeting middle managers

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