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President-elect Donald Trump was early to warn about the national security dangers posed by TikTok during his first term in office, with rhetoric and policy discussions that framed the social media app within his aggressive anti-China stance. But during the 2024 campaign, Trump seemed to do an about-face.
In an interview on CNBC’s “Squawk Box” last March, Trump said banning TikTok would make young people “go crazy” and would also benefit Meta Platforms‘ Facebook.
“There’s a lot of good and there’s a lot of bad with TikTok,” Trump said. “But the thing I don’t like is that without TikTok, you can make Facebook bigger, and I consider Facebook to be an enemy of the people, along with a lot of the media.”
Trump’s transition team hasn’t commented on TikTok specifically, but has said the election results give the president a mandate to follow through on the promises he made on the campaign trail, and there are some big deadlines coming up related to TikTok’s fate.
Before Trump is even president, the U.S. Court of Appeals for the D.C. Circuit is expected to issue a ruling by Friday on a challenge to the new law requiring ByteDance, TikTok’s Chinese parent company, to divest its U.S. operations by January 19. This case has broad implications, touching on national security concerns, constitutional questions about free speech, and the future of foreign-owned tech platforms in the U.S.
Courts generally defer to the executive and legislative branches on national security matters, but the outcome may depend on whether the court frames the issue solely as a national security question or also considers First Amendment concerns. The balance likely favors the government given Congress’s clear constitutional authority to regulate foreign commerce, which supports the legislation requiring ByteDance divestment. Regardless, this case is likely headed to the Supreme Court.
As of now, with Trump to be sworn in on Jan. 20, one day after the federal ban on TikTok is scheduled to begin, Trump’s comments have intensified deep concerns about the influence that major donors will have in a second Trump administration and the extent to which private financial interests will be prioritized over national security and public welfare. In fact, it may be the first major decision made by Trump that tells us just how far his administration is willing to go in prioritizing the donor wish list.
At the center of this controversy is Jeff Yass, a major Republican donor with significant financial ties to ByteDance, TikTok’s parent company. Yass, who contributed over $46 million to Republican causes during the 2024 election cycle, reportedly met with Trump in March, though the details of their conversation remain unclear. What is clear, however, is that Yass’s ownership stake in ByteDance has fueled concerns in Washington about whether Trump’s reversal was influenced by donor priorities rather than a pure devotion to market competition.
The Wall Street Journal recently reported that TikTok’s CEO has been personally lobbying Elon Musk, who now has a close relationship with the President-Elect, on his company’s behalf. Meanwhile, Meta’s Mark Zuckerberg dined with Trump at Mar-a-Lago last week.
The optics of a TikTok ban reversal are troubling. Imagine the backlash if a prominent Democratic donor like George Soros — frequently vilified by Republicans — had similarly positioned himself to influence major policy decisions tied to his personal financial interests. The accusations of corruption and undue influence, if not worse, would be deafening. Yet figures like Yass and particularly Elon Musk — who has duct-taped himself, and his entangled financial interests to Trump’s transition team and many of their personnel and policy decisions — face little scrutiny from the same critics who level conspiracy theories against Soros.
This selective outrage underscores a systemic problem: a political system where major donors wield significant influence over policymaking, often without bipartisan expressions of concern or actions that force transparency or accountability.
TikTok’s weaponized influence
Concerns about donor influence are amplified when considering the risks associated with TikTok itself. The app’s meteoric rise has sparked bipartisan alarm over its ties to the Chinese government. Lawmakers and intelligence officials have consistently warned about its potential for data harvesting, espionage, and propaganda. These concerns are not abstract. During the last congressional push to ban TikTok, the app demonstrated its ability to weaponize its platform by rapidly mobilizing its user base to flood lawmakers with calls and emails opposing the ban.
This real-time demonstration of TikTok’s ability to influence public sentiment, amplify social narratives, and pressure lawmakers underscores its unparalleled capacity as a tool for shaping public policy and national opinions. When coupled with ByteDance’s links to the Chinese government, TikTok’s potential for misuse or mischief is alarming.
Another concern around a TikTok ban reversal is the fact that there is already a law addressing TikTok: the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA), enacted in April 2024 as part of Public Law 118-50. This bipartisan legislation mandates that foreign adversary-controlled applications, like TikTok, must be divested or face a U.S. ban. As federal law, PAFACA cannot simply be reversed by presidential decree. A U.S. president cannot legally bypass Congress to nullify or override an existing law. Laws passed by Congress remain binding until they are repealed or amended by Congress or struck down by the courts.
Instead of bypassing Congress or undermining existing law, any changes to TikTok’s status should be addressed through the framework that PAFACA provides. Such a transparent process would ensure that decisions are made in public and on behalf of the public interest, not in the backrooms at Mar-a-Lago. With Republicans controlling both the House and Senate during the newly elected Congress, they have the power to amend or repeal PAFACA. However, doing so would require navigating a highly involved legislative process that would inevitably bring more scrutiny to Yass.
Trump’s options
Given Trump’s dominance of the federal courts at the highest level, he could use this route, but short of the courts, the president’s authority in this context is limited. Any Trump effort to unilaterally overturn a TikTok ban as president would be difficult to execute based on how the system is supposed to work.
Two options Trump would have are enforcement discretion and executive orders. The president has considerable discretion in how federal laws are enforced. For instance, executive agencies might prioritize certain aspects of a law over others, effectively scaling down enforcement in particular areas. While executive orders cannot override existing laws, they can guide how the executive branch implements them, potentially narrowing their scope. Presidents have historically used enforcement discretion to achieve policy objectives without openly violating the law.
But addressing TikTok through the existing legal framework already established by PAFACA would allow for the consideration of balanced alternatives, such as requiring stricter data security measures, local data storage, or divestiture that places TikTok’s operations under U.S. ownership. These options could protect users’ access to the app while addressing legitimate security risks.
Many of these alternatives have been explored in public discussions and through proposals like “Project Texas,” and some have found their way into law. They have also been subject to criticism and challenges, largely about insufficient follow-through or the perception that these efforts are not thorough, would never be agreed to by the Chinese government, or are just incomplete or inadequate to address security concerns. But consideration of these remedies should continue — to date, the execution has been nonexistent rather than the proposals being outright failures.
The broader implications of donor-driven policy
Trump’s March comments on TikTok get one thing right. It is important to acknowledge that TikTok’s immense popularity creates another unique dilemma. With over 150 million users in the U.S., the app is more than just a platform for entertainment — it has become a key tool for creativity, connection, and commerce, particularly among younger Americans and small businesses. This widespread use complicates the conversation, as any decision about TikTok’s future will inevitably affect millions of people who rely on it for various purposes.
However, the app’s popularity should not outweigh the national security concerns it poses, particularly given its ties to the Chinese government. ByteDance’s well-documented connections to the Chinese government have heightened fears in Washington about the potential misuse of TikTok’s data collection capabilities. These risks are not speculative — they reflect patterns of behavior consistent with Chinese state-sponsored cyber activities. Allowing donor-driven priorities to eclipse these legitimate security concerns undermines public trust in the policymaking process and erodes confidence in government institutions.
This situation raises a critical question: What other national priorities might be sacrificed to appease donors with outsized influence? If decisions about TikTok — an app that elicits bipartisan concerns about its national security implications — can be swayed, what does this mean for other pressing issues like energy policy, defense, or trade? The stakes are far too high to let financial interests dictate public policy outcomes.
Americans deserve a government that treats national security as a top priority and not one that is negotiable or secondary to the interests of private wealthy donors.
—ByDewardric McNeal, managing director & senior policy analyst at Longview Global and CNBC contributor, who served as an Asia policy specialist at the Defense Department during the Obama administration.
Startup Figure AI is developing general-purpose humanoid robots.
Figure AI
Figure AI, an Nvidia-backed developer of humanoid robots, was sued by the startup’s former head of product safety who alleged that he was wrongfully terminated after warning top executives that the company’s robots “were powerful enough to fracture a human skull.”
Robert Gruendel, a principal robotic safety engineer, is the plaintiff in the suit filed Friday in a federal court in the Northern District of California. Gruendel’s attorneys describe their client as a whistleblower who was fired in September, days after lodging his “most direct and documented safety complaints.”
The suit lands two months after Figure was valued at $39 billion in a funding round led by Parkway Venture Capital. That’s a 15-fold increase in valuation from early 2024, when the company raised a round from investors including Jeff Bezos, Nvidia, and Microsoft.
In the complaint, Gruendel’s lawyers say the plaintiff warned Figure CEO Brett Adcock and Kyle Edelberg, chief engineer, about the robot’s lethal capabilities, and said one “had already carved a ¼-inch gash into a steel refrigerator door during a malfunction.”
The complaint also says Gruendel warned company leaders not to “downgrade” a “safety road map” that he had been asked to present to two prospective investors who ended up funding the company.
Gruendel worried that a “product safety plan which contributed to their decision to invest” had been “gutted” the same month Figure closed the investment round, a move that “could be interpreted as fraudulent,” the suit says.
The plaintiff’s concerns were “treated as obstacles, not obligations,” and the company cited a “vague ‘change in business direction’ as the pretext” for his termination, according to the suit.
Gruendel is seeking economic, compensatory and punitive damages and demanding a jury trial.
Figure didn’t immediately respond to a request for comment. Nor did attorneys for Gruendel.
The humanoid robot market remains nascent today, with companies like Tesla and Boston Dynamics pursuing futuristic offerings, alongside Figure, while China’s Unitree Robotics is preparing for an IPO. Morgan Stanley said in a report in May that adoption is “likely to accelerate in the 2030s” and could top $5 trillion by 2050.
Concerns about stock valuations in companies tied to artificial intelligence knocked the market around this week. Whether these worries will recede, as they did Friday, or flare up again will certainly be something to watch in the days and weeks ahead. We understand the concerns about valuations in the speculative aspects of the AI trade, such as nuclear stocks and neoclouds. Jim Cramer has repeatedly warned about them. But, in the past week, the broader AI cohort — including real companies that make money and are driving what many are calling the fourth industrial revolution — has been getting hit. We own many of them: Nvidia and Broadcom on the chip side, and GE Vernova and Eaton on the derivative trade of powering these energy-gobbling AI data centers. That’s not what should be happening based on their fundamentals. Outside of valuations, worries also center on capital expenditures and the depreciation that results from massive investments in AI infrastructure. On this point, investors face a choice. You can go with the bears who are glued to their spreadsheets and extrapolating the usable life of tech assets based on history, a seemingly understandable approach, and applying those depreciation rates to their financial models, arguing the chips should be near worthless after three years. Or, you can go with the commentary from management teams running the largest companies driving the AI trade, and what Jim has gleaned from talking with the smartest CEOs in the world. When it comes to the real players driving this AI investment cycle, like the ones we’re invested in, we don’t think valuations are all that high or unreasonable when you consider their growth rates and importance to the U.S., and by extension, the global economy. We’re talking about Nvidia CEO Jensen Huang, who would tell you that advancements in his company’s CUDA software have extended the life of GPU chip platforms to roughly five to six years. Don’t forget, CoreWeave recently re-contracted for H100s from Nvidia, which were released in late 2022. The bears with their spreadsheets would tell you those chips are worthless. However, we know that H100s have held most of their value. Or listen to Lisa Su, CEO of Advanced Micro Devices , who said last week that her customers are at the point now where “they can see the return on the other side” of these massive investments. For our part, we understand the spending concerns and the depreciation issues that will arise if these companies are indeed overstating the useful lives of these assets. However, those who have bet against the likes of Jensen Huang and Lisa Su, or Meta Platforms CEO Mark Zuckerberg, Microsoft CEO Satya Nadella, and others who have driven innovation in the tech world for over a decade, have been burned time and again. While the bears’ concerns aren’t invalid, long-term investors are better off taking their cues from technology experts. AI is real, and it will increasingly lead to productivity gains as adoption ramps up and the technology becomes ingrained in our everyday lives, just as the internet has. We have faith in the management teams of the AI stocks in which we are invested, and while faith is not an investment strategy, that faith is based on a historical track record of strong execution, the knowledge that offerings from these companies are best in class, and scrutiny of their underlying business fundamentals and financial profiles. Siding with these technology expert management teams, over the loud financial expert bears, has kept us on the right side of the trade for years, and we don’t see that changing in the future. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust, including NVDA, AVGO, GEV, ETN, META, MSFT.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: The S & P 500 bounced back Friday, recovering from the prior session’s sharp losses. The broad-based index, which was still tracking for a nearly 1.5% weekly decline, started off the session a little shaky as Club stock Nvidia drifted lower after the open. It was looking like concerns about the artificial intelligence trade, which have been dogging the market, were going to dominate back-to-back sessions. But when New York Federal Reserve President John Williams suggested that central bankers could cut interest rates for a third time this year, the market jumped higher. Rate-sensitive stocks saw big gains Friday. Home Depot rose more than 3.5% on the day, mitigating a tough week following Tuesday’s lackluster quarterly release. Eli Lilly hit an all-time high, becoming the first drugmaker to reach a $1 trillion market cap. TJX also topped its all-time high after the off-price retailer behind T.J. Maxx, Marshalls, and HomeGoods, delivered strong quarterly results Wednesday. Carry trade: We’re also monitoring developments in Japan, which is dealing with its own inflation problem and questions about whether to resume interest rate hikes. That brings us to the popular Japanese yen carry trade, which is getting squeezed as borrowing costs there are rising. The yen carry trade involves borrowing yen at a low rate, then converting them into, say, dollars, and investing in higher-yielding foreign assets. That’s all well and good when the cost to borrow yen is low. It’s a different story now that borrowing costs in Japan are hitting 30-year highs. When rates rise, the profit margin on the carry trade gets crunched, or vanishes completely. As a result, investors need to get out, which means forced selling and price action that becomes divorced from fundamentals. It’s unclear if any of this is adding pressure to U.S. markets. We didn’t see anything in the recent quarterly earnings reports from U.S. companies to suggest corporate fundamentals are deteriorating in any meaningful way. That’s why we’re looking for other potential external factors, alongside the well-known concerns about artificial intelligence spending, the depreciation resulting from those capital expenditures, and general worries about consumer sentiment and inflation here in America. Wall Street call: HSBC downgraded Palo Alto Networks to a sell-equivalent rating from a hold following the company’s quarterly earnings report Wednesday. Analysts, who left their $157 price target unchanged, cited decelerating sales growth as the driver of the rerating, describing the quarter as “sufficient, not transformational.” Still, the Club name delivered a beat-and-raise quarter, which topped estimates across every key metric. None of this stopped Palo Alto shares from falling on the release. We chalked the post-earnings decline up to high expectations heading into the quarter, coupled with investor concerns over a new acquisition of cloud management and monitoring company Chronosphere. Palo Alto is still working to close its multi-billion-dollar acquisition of identity security company CyberArk , announced in July. HSBC now argues the stock’s risk-versus-reward is turning negative, with limited potential for upward estimate revisions for fiscal years 2026 and 2027. We disagree with HSBC’s call, given the momentum we’re seeing across Palo Alto’s businesses. The cybersecurity leader is dominating through its “platformization” strategy, which bundles its products and services. Plus, Palo Alto keeps adding net new platformizations each quarter, converting customers to use its security platform, and is on track to reach its fiscal 2030 target. We also like management’s playbook for acquiring businesses just before they see an industry inflection point. With Chronosphere, Palo Alto believes the entire observability industry needs to change due to the growing presence of AI. We’re reiterating our buy-equivalent 1 rating and $225 price target on the stock. Up next: There are no Club earnings reports next week. Outside of the portfolio, Symbotic, Zoom Communications , Semtech , and Fluence Energy will report after Monday’s close. Wall Street will also get a slew of delayed economic data during the shortened holiday trading week. U.S. retail sales and September’s consumer price index are scheduled for release early Tuesday. Durable goods orders and the Conference Board consumer sentiment are released on Wednesday morning. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.