Threat of TikTok ban has creators scrambling to build followings on Instagram, YouTube
Chad Spangler filming a video.
Courtesy: Chad Spangler
As TikTok CEO Shou Zi Chew faced hours of grueling questioning from members of Congress in late March, small business owner Chad Spangler watched in frustration.
The bipartisan congressional committee was exploring how TikTok, the massively popular short-form video app owned by China’s ByteDance, could pose a potential privacy and security threat to U.S. consumers.
Representatives grilled Chew about the app’s addictive features, possibly dangerous posts and whether U.S. user data could end up in the hands of the Chinese government. Politicians have been threatening a nationwide TikTok ban unless ByteDance sells its stake in the app, a move China said it “strongly” opposed.
But that’s not the only source of dissent. Creators such as Spangler, who sells his artwork online, are worried about their livelihood.
TikTok has emerged as a major piece of the so-called creator economy, which has swelled past $100 billion annually, according to Influencer Marketing Hub. Creators have formed lucrative partnerships with brands, and small business owners such as Spangler use the sizable audiences they’ve built on TikTok to promote their work and drive traffic to their websites.
“That’s the power of TikTok,” Spangler said, adding that the app drives the majority of sales for his business, The Good Chad. “They’ve captured the lightning in the bottle that other platforms just haven’t been able to do yet.”
Spangler has more than 200,000 followers on TikTok, and his business brought in over $100,000 last year, largely because of his reach there. Influencer Marketing Hub’s data shows that the average annual income for an influencer in the U.S. was over $108,000, as of 2021.
TikTok has been on a meteoric rise in the U.S., capturing an increasing amount of consumer attention from people who used to spend more time on Facebook, Instagram, Snapchat and Twitter. In 2021, TikTok topped a billion monthly users. An August Pew Research Center survey found that 67% of teens in the U.S. use TikTok and 16% said they are on it almost constantly.
Advertisers are following eyeballs. According to Insider Intelligence, TikTok now controls 2.3% of the worldwide digital ad market, putting it behind only Google, including YouTube; Facebook, including Instagram; Amazon, and Alibaba.
But with Congress bearing down on TikTok, the app’s role in the future of U.S. social media is shaky, as is the sustainability of businesses that have come to rely on it.
TikTok CEO Shou Zi Chew testifies before the House Energy and Commerce Committee hearing on “TikTok: How Congress Can Safeguard American Data Privacy and Protect Children from Online Harms,” on Capitol Hill, March 23, 2023, in Washington, DC.
Olivier Douliery | Afp | Getty Images
In April, Montana legislators approved a bill that would ban TikTok from being offered in the state starting next year. TikTok said it opposes the bill, and claims there’s no clear way for the state to enforce it.
Congress has already banned the app on government devices, and some U.S. officials are trying to forbid its use altogether unless ByteDance divests.
ByteDance did not respond to CNBC’s request for comment.
The White House also threw its support behind a bipartisan Senate bill in March called the RESTRICT Act, which would give the Biden administration the power to ban platforms such as TikTok. But following significant pushback, momentum behind the bill has slowed dramatically.
As the debate gains steam, creators are in a state of limbo.
Creators are turning to other platforms
Vivian Tu, who lives in Miami, has been preparing for a possible TikTok ban by working to build her audience and diversify her content across multiple platforms.
She began posting on TikTok in 2021 as a fun way to help answer co-workers’ questions about finance and investing. By the end of her first week on the platform, she had more than 100,000 followers. Last year, she left behind a career on Wall Street and in tech media to pursue content creation full time.
Tu shares videos in an effort to serve as a friendly face for financial expertise. Aside from posting on TikTok, she uses Instagram, YouTube and Twitter, and she also runs a podcast and a weekly newsletter.
Tu said she began building out her presence on multiple platforms before a potential TikTok ban entered the equation, and she’s hoping she spread out her income sources enough to be OK if anything happens. But she called her work on TikTok, where she has more than 2.4 million followers, her “pride and joy.”
“It would be a huge letdown to see the app get banned,” she told CNBC in an interview.
The top social media companies in the U.S. are preparing to try to fill the vacuum.
Meta, which owns Instagram and Facebook, has been pumping money into its TikTok copycat, called Reels. CEO Mark Zuckerberg said on the company’s earnings call last month that users are resharing videos over 2 billion times a day, a number that’s doubled in the past six months, adding “we believe that we’re gaining share in short-form video.”
Snap and YouTube have been pouring billions of dollars into their own short-video features to compete with TikTok.
Tu said she expects there will be a “massive exodus” of creators that flock to other platforms if TikTok is banned, but that the app is hard to beat when it comes to discovering new and relevant content.
“That’s why someone like myself, who didn’t have a single follower, didn’t have a single video, could make a video and have the very first one get 3 million views,” she said. “That really doesn’t happen anywhere else.”
Emily Foster with her stuffed animals.
Source: Emily Foster
Emily Foster, a small business owner, agrees. She said other media platforms can’t come close to offering the type of exposure she gets from TikTok.
Foster designs stuffed animals that she sells through her Etsy shop and her website called Alpacasews. She said she started sewing the plushies by hand as gifts for her friends and on commission. But when a video of a dragon she made during the pandemic received 1,000 views on TikTok — a number that’s tiny for her these days — she said it gave her the confidence to open an Etsy shop.
“I was like, ‘Oh my god, this could be something,'” she told CNBC.
Foster’s designs quickly gained traction on TikTok, where she now has more than 250,000 followers. She recently shared a behind-the-scenes video that showed her packaging up an order for someone who ordered one of every stuffed animal in her Etsy shop. The video quickly amassed more than 500,000 views, and her entire inventory sold out within a day.
‘Audience just isn’t there’
Demand for Foster’s stuffies soon outpaced her ability to make them by hand, so she turned to crowdfunding site Kickstarter to raise money to cover manufacturing costs. She raised over $100,000 in her most recent Kickstarter campaign, which came after three of her videos went viral on TikTok.
“My business would never be where it is today without TikTok,” she said.
With the looming threat of a TikTok ban, Foster said she’s been sharing content across Instagram, YouTube and Twitter to try to expand her following. At this point, she said, her business would probably survive if TikTok goes away, but it would be difficult.
“The audience just isn’t there, especially for smaller creators,” she said.
Beyond the money, Foster is concerned about losing the following she’s worked so hard to build. She said she’s met “fantastic” friends, artists and other small business owners on the platform.
“You’re never quite alone. It means a lot,” she said. “I’m stressed about potentially losing sales, potentially losing customers, but it’s more so just losing a community that’ll break my heart.”
For Spangler, the artist, the debate surrounding TikTok is maddening not just because of what it could mean for his livelihood, but because it seems to him that lawmakers are ill-informed about what the app does.
Spangler recalled one Republican congressman asking Chew in his testimony about whether TikTok connects to a user’s home Wi-Fi network.
“If you even have a working knowledge of anything technology related, if you watched those hearings, it was just very embarrassing,” Spangler said. “What’s extra frustrating is it feels like this is being potentially taken away from me by people who have no idea how any of this works.”
Spangler channeled his anger into his artwork. After the hearing, he designed a T-shirt featuring a zombie-like congressman with the phrase, “Does the TikTak use a Wi-Fi?”
He shared a video about it on TikTok and made almost $2,500 from T-shirt sales in less than two days.
WATCH: TikTok’s regulatory scrutiny may be a tailwind for Meta
Frederic J. Brown | Afp | Getty Images
DETROIT – The U.S. automotive industry has entered a new phase for all-electric vehicles: realism.
The industry was euphoric about the EV segment in the early 2020s, but consumer demand never took off as much as expected and, as it fizzled, automakers monitored and planned how to react. Now, they’re pivoting, as companies have wasted billions of dollars in capital, Detroit automakers are refocusing on large gas-guzzling trucks and SUVs, and many have admitted that policies, not consumers, were driving the charge for EVs.
“We have to make the investments to get to … the regulatory environment they set. We’ve seen a complete change in that. One way, 180 degrees. One way, 180 degrees back. That’s the world CEOs of automakers are living in,” GM CEO and Chair Mary Barra said earlier this month during The New York Times’ DealBook conference.
How automakers like GM that invested heavily in EVs will respond over the next year will be telling for the future of the vehicles in the U.S., according to industry insiders and experts.
Barra said “it’s too early to tell” what true demand for EVs is following the end of up to $7,500 in federal incentives in September to purchase an electric vehicle. She said the industry will likely find its natural demand over the next six months.
In the meantime, GM continues to reassess its EV plans after disclosing a $1.6 billion impact from its pullback in those investments, with more write-downs expected in the future. Ford Motor last week said it expects to record about $19.5 billion in special items related to a restructuring of its business priorities and a pullback in its all-electric vehicle investments.
“We evaluated the market, and we made the call. We’re following customers to where the market is, not where people thought it was going to be,” Ford CEO Jim Farley told CNBC last week.
U.S. EV sales peaked in September, ahead of the federal incentives ending, at 10.3% of the new vehicle market, according to Cox Automotive. That demand plummeted to preliminary estimates of 5.2% during the fourth quarter.
“The long-term direction toward electrification remains clear: The future is electric. However, the timeline is being recalibrated,” said Stephanie Valdez Streaty, Cox director of industry insights. “In the near term, automakers will continue to adjust their strategies and significantly expand hybrid offerings to meet consumers where they are today.”
Most industry experts, including those at consulting firm PwC, don’t believe it’s the end days for EVs, but rather that expectations are more realistic now. PwC expects the EV industry to pick up toward the end of this decade, with EVs forecast to make up 19% of the U.S. industry by 2030.
“As several of the U.S. [automakers] have announced, there’s some level of charges, and we got out in front of the customer demand and likely the infrastructure that’s otherwise available here in the U.S.,” C.J. Finn, U.S. automotive industry leader for PwC, told CNBC.
‘What is the normal state of EVs?’
That projected EV market share doesn’t justify the billions of dollars companies have spent on the research, development and production of the vehicles, so automakers are significantly altering their plans to allow customers more choice of all-electric vehicles, hybrids and traditional internal combustion engines.
“If you think back a few years ago, it was like, ‘If you’re not all-in on EV, you’re going to eventually go out of business. Your terminal value is zero,'” KPMG partner and U.S. automotive leader Lenny LaRocca told CNBC. “Now I think that multi-propulsion technology approach is what’s panning out to work out well. We used to call it the ‘mosaic of powertrains.'”
A NYC charging station seen in the Yorkville neighborhood of New York City.
Adam Jeffery | CNBC
The changes have taken different forms for companies that have already heavily invested in EVs.
GM, which was by far leading in such investments in the U.S., will continue to offer its current models but has little to no plans of expanding in the future, according to Barra. Instead, it will use some of its planned capacity for increased production of large trucks and SUVs. The automaker also has said it plans to offer plug-in hybrid vehicles in the years ahead, but it hasn’t disclosed many other details.
Ford has said it will refocus investments on hybrid vehicles, including plug-in models rather than pure EVs; cancel a next generation of large all-electric trucks in exchange for smaller, more affordable EVs; and rebalance its investments in core products such as trucks and SUVs.
And Stellantis is deprioritizing EVs, including for its coveted Jeep brand, as it attempts to revive its U.S. sales.
“All of us are waiting to see what the demand is, how it’s going to continue to shake out,” Jeep CEO Bob Broderdorf told CNBC. “The [EV] industry will slide. It’s going to slow down. And then what is the normal state of EVs?”
Hyundai, which also invested billions in EVs, is taking a mixed approach compared with its peers. Like GM, it plans to continue offering its current models but it is also expected to have new models coming. On the other hand, like Ford, it’s decided to more heavily emphasize hybrids and allocated production at a new $7.6 billion plant for Hyundai and Kia vehicles in Georgia.
Others such as Honda, Nissan, Porsche, Volvo and Jaguar that announced ambitious plans for EVs have canceled or significantly scaled back those goals. GM also has backtracked on its pledge to exclusively offer EVs by 2035, including several of its brands before that time frame.
The Tesla effect
A litany of factors played into the current EV marketplace, including industry dynamics and external factors such as pressure from Wall Street and political whiplash from the Trump and Biden administrations.
“No doubt the policy had a big impact on customer demand. The net-net is the market’s changed,” Farley told CNBC last Monday.
The bullishness around EVs began with the rise of Tesla. The company, which remains the U.S. leader in EV sales by a wide margin, was able to significantly boost sales and its market valuation from Wall Street analysts at the beginning of this decade.
That led other automakers to take notice and, as the industry does, attempt to replicate Tesla’s success, according to officials. But what executives didn’t realize was consumers were buying Teslas — not just any EV.
“Tesla wasn’t creating a battery-electric vehicle market. They created a market for the Tesla brand.” said Stephanie Brinley, associate director in AutoIntelligence at S&P Global Mobility.
Tesla vehicles were, and continue to be, a “tech-buy” of software-first products that just happened to be EVs, Brinley said. The company also set up its own charging network and created a tech-savvy customer base of loyalists who looked past many quality and growing pain issues.
A Tesla Cybertruck near General Motors’ Renaissance Center world headquarters in Detroit.
Michael Wayland / CNBC
That success led Wall Street to seek out the “next Tesla,” ushering in an unsustainable amount of new companies. From 2019 to 2022, nearly a dozen EV carmakers went public as well as a litany of related ones. Most of those have gone bankrupt amid federal investigations, scandals and executive upheaval.
“The attention that Tesla got woke everyone else up. But now there’s competition, and there’s competition from trusted, known and respected brands,” Brinley said.
The euphoria surrounding EVs started waning as companies kept spending with little to no success and “legacy” automakers entered the market, investing big sums to bring unprofitable vehicles to market.
Hopes for profitable EVs further eroded with the second inauguration of President Donald Trump this year. Trump has killed or rolled back many of the Biden administration’s support and funding for the sale and production of EVs.
The biggest blow was in September with the end of up to $7,500 federal incentives for the purchase of an EV.
“The end of federal incentives came to an abrupt stop at the end of Q3, driving a lot of demand and sales for the new and used market,” Jeremy Robb, Cox interim chief economist, said last week. “Since then, we’ve seen the slowdown in both the pace of sales as well as the growth of new vehicle production. Next year will be pivotal for EVs.”
ServiceNow will acquire cybersecurity startup Armis in a cash deal valued at $7.75 billion, the company said Tuesday.
The enterprise software company said the deal will bolster its cybersecurity capabilities in the age of artificial intelligence and more than triple its market opportunity for security and risk solutions.
“This is about making a strategic move to accelerate growth, and we see the opportunity for our customers,” CEO Bill McDermott told CNBC’s “Squawk on the Street” on Tuesday. “In this AI world, especially with the agents, you’re going to need to protect these enterprises [because] every intrusion is a multi-million dollar problem.”
ServiceNow said the deal is expected to close in the second half of next year, financed by a combination of cash and debt.
The company has been on an acquisition spree in 2025 as it sought to accelerate growth, McDermott said.
ServiceNow announced a deal for AI agent platform Moveworks for $2.85 billion in March, and at the beginning of December, said it would acquire identity security platform Veza.
“ServiceNow will have the only AI control tower that drives workflow, action and business outcomes across all of these environments,” McDermott added.
Bloomberg first reported earlier this month that Armis was exploring a possible $7 billion deal with ServiceNow.
In November, the California-based company, which helps businesses protect internet-connected devices from cyber risks, said it had raised $435 million at a $6.1 billion valuation.
At the time, co-founder Yevgeny Dibrov told CNBC that Armis was looking to go public in 2026 or 2027, but his main objective was to surpass $1 billion in annual recurring revenues.
“The need for what Armis is doing and what we are building, in this cyber exposure management and security platform, is just increasing,” he said, adding that there’s “very unique and huge” demand for its tools.
Many companies have opted to stay private for longer or get acquired as a turbulent initial public offering market has begun to rebound. Large companies such as Stripe and Databricks have found an influx of capital in private markets.
In the age of AI, companies are spending more on cybersecurity to protect against increasingly sophisticated threats.
This year has also been significant for major cybersecurity deals as companies look to enhance their threat protection capabilities. That includes Google’s $32 billion acquisition of cloud security startup Wiz and Palo Alto Networks’ $25 billion deal for CyberArk.
ServiceNow said Armis has topped $340 million in annual recurring revenue with 50% year-over-year growth, up from $300 million disclosed in August.
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