TikTok’s Actual Offense? Innovating While Not Being American

TikTok’s Actual Offense? Innovating While Not Being American Authored by John Tamny via RealClearMarkets, Ten days ago the shares of Nvidia corrected 17 percent. How could this have happened to such an “owned” and analyzed company? The answer, at least as of now, is that surprise over inexpensively trained and very capable DeepSeek forced investors to at least rethink Nvidia’s long-term dominance.  The news on January 26th gave investors reason to at least question whether the current face of AI would perhaps be disrupted by dynamism within the sector that its chips had helped create. It’s worth thinking about Nvidia and the market meaning of DeepSeek’s surprising rollout with TikTok top of mind.  China-fearful politicians have voted to ban TikTok in the United States unless it can find an American owner. Forget for a moment that TikTok is already American owned, and simply ask the question about whether or not the same politicians would have pursued “sell or ban” legislation if TikTok were an unknown. Hopefully the question answers itself.  TikTok’s problem is that it discovered the future of social media much more effectively than its American competition. At which point it can be said that the attacks on TikTok aren’t much different from antitrust attacks over the years on American companies like Amazon, Apple, Google, Live Nation, and many others.  What’s important about those suits is that none of them took place when Amazon had the nickname “Amazon.org,” or when Apple was near bankruptcy, when Google was an unknown David to Yahoo’s Goliath, or when Live Nation was one of many cheaply priced entertainment companies trying to divine how the internet and streaming would upend the music industry. It’s just a comment that antitrust ankle biters never discover dominance in its ascendance  Antitrust is by definition a look backwards, and an attempt to penalize the businesses that had the temerity to discover a previously unknown commercial future. TikTok’s travails are a manifestation of the previous truth. Having led the needs of social media users much better than the American competition, TikTok faces a forced separation from the investors and innovators that made it great in the first place. In short, the political class is taking a page from the antitrust playbook in its attempt to wrest TikTok away from its owners on the cheap. Which requires more thought beyond the odious antitrust flavor of TikTok’s theft.  Its ascendance from unknown to the world’s most popular social media company plainly discredits the excuses bruited by politicians as they attempt to take it. Former Rep. Mike Gallagher has excused his own long fingers with op-eds at the Wall Street Journal asserting that TikTok is “controlled by the Chinese Communist Party.” No, government-controlled businesses are never this popular. Other conservatives (including Gallagher) claim the problem with TikTok is that it will gather data on American users for the Chinese Communist Party. That’s similarly an empty excuse when it’s remembered that all user supported sites attain their value from the data gleaned from those users; data that is subsequently sold.  Which brings us back to the “sell or ban” legislation from a U.S. political class that should hang its collective head in shame. As is the case with all antirust attacks, the attempt to break up and take TikTok personifies obnoxious conceit about the future of a commercial sector defined by relentless change, including change at the top.  Assuming the political class can pull off its attempted heist, rest assured that the thieving of successful businesses for innovating while not being American won’t end with TikTok. And that’s because antitrust is by its very name is once again a look backwards. See the DeepSeek surprise if you’re confused.  John Tamny is editor of RealClearMarkets, President of the Parkview Institute, a senior fellow at the Market Institute, and a senior economic adviser to Applied Finance Advisors (www.appliedfinance.com). His next book is The Deficit Delusion: Why Everything Left, Right and Supply Side Tell You About the National Debt Is Wrong.  Tyler Durden Fri, 02/07/2025 – 06:30