TikTok Had a Tumultuous Year. What’s Ahead in 2025?

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[00:00:19] Welcome to Tech News Briefing. It's Tuesday, December 31st. I'm Julie Chang for The Wall Street Journal.

[00:00:25] We're hearing from our reporters and columnists about some of the biggest companies, trends,

[00:00:30] and people in tech, and what could be in store for 2025. TikTok faces an uncertain future in the U.S.

[00:00:38] The Supreme Court is set to decide whether a law that would ban the app over national security

[00:00:43] concerns violates the First Amendment. Oral arguments are set to begin days before the ban is supposed to

[00:00:49] take effect on January 19th. The law would ban TikTok if it doesn't shed its Chinese ownership.

[00:00:55] TikTok's parent company, ByteDance, has said that it can't and won't sell its U.S. business.

[00:01:00] Last week, President-elect Donald Trump asked the Supreme Court to stop the ban from taking effect,

[00:01:05] saying he wants to pursue a negotiated resolution to prevent a nationwide shutdown of the social

[00:01:10] media giant. Meanwhile, TikTok has continued to accrue cultural capital, attracting the likes of

[00:01:16] politicians, legacy media outlets, and of course, influencers. But what could happen to the app in

[00:01:22] the next year? Our tech reporter Georgia Wells covers social media, and she spoke with her colleague

[00:01:27] Bell Lin about this. Here's their conversation. So give us a bit of an overview of how we got to

[00:01:36] this point where TikTok is, again, fighting a ban or a forced sale in the U.S.

[00:01:41] So TikTok is owned by a Chinese company called ByteDance. And so basically, for years, TikTok has faced this

[00:01:49] scrutiny about its ties to China. And so like even way back in 2020, Trump tried to ban TikTok with an

[00:01:56] executive order, but that fell apart in court. But that kind of set the stage for the scrutiny TikTok

[00:02:03] was going to be under kind of throughout its existence in the U.S. And so for years, they were

[00:02:08] negotiating with this panel called CFIUS that looks at foreign investment in the U.S. And

[00:02:13] they were hoping to come to some sort of agreement with them, but that didn't happen. And then late

[00:02:18] last year and continuing into earlier this year, lawmakers in Congress quietly put together this

[00:02:25] legislation to require TikTok's parent company to sell them or to face getting banned in this country.

[00:02:31] And what about President-elect Trump nowadays? Where do we think he stands on a TikTok ban in

[00:02:38] the U.S. or a forced resale?

[00:02:40] So Trump recently asked the Supreme Court to pause this whole TikTok shutdown process.

[00:02:46] And he said that keeping TikTok operating would preserve the First Amendment rights for the tens of

[00:02:52] millions of Americans who are using TikTok. So this is clearly quite a reversal from his stance towards

[00:02:59] TikTok way back in 2020 when he sought to engineer a ban.

[00:03:04] Yeah. Another interesting sort of tidbit is that the journals reported that TikTok's CEO has

[00:03:10] sought Elon Musk's counsel on the incoming Trump administration. What's the significance of this?

[00:03:16] Well, it's super interesting because Elon Musk has, at a time when it's been really hard for many

[00:03:22] American business owners to do business in China, Elon Musk has done business in China through Tesla.

[00:03:29] And so Elon Musk has some of the strongest American business ties to China. And so we don't know what's

[00:03:37] going to happen, but if TikTok sees an ally in Elon Musk, clearly that's like a way to get to Trump.

[00:03:44] One of TikTok's challenges is not only do they have to satisfy kind of American concerns about their

[00:03:49] ownership, but any action TikTok takes also will have to ultimately get approved by the Chinese

[00:03:55] government. And so they're caught in this political bind, in this like geopolitical crosshairs.

[00:04:00] And Trump potentially, if he's going to be an ally for TikTok, that could be really super powerful

[00:04:06] because there aren't that many prominent business people who have been successful or managed to do

[00:04:13] business and also like create strong ties in both countries.

[00:04:15] That's right. And for American users, if a ban does happen, would the app just disappear?

[00:04:22] The way we understand it would be implemented initially is it could remain on devices where

[00:04:27] it's currently downloaded, but the app stores, so Google and Apple would have to delist it so

[00:04:32] they wouldn't have new people coming on. So initially it would be a regular version of TikTok

[00:04:36] on your phone, but they wouldn't be able to update it. So it would increasingly become old,

[00:04:41] clunky. And also when apps can't get updated, sometimes like security flaws are discovered.

[00:04:46] So that can just be a thorny mess. So we don't know how that would look in the long term,

[00:04:51] but it wouldn't disappear completely overnight.

[00:04:54] Right. But to your point, a mess is still frustrating for TikTok's huge user base in the

[00:05:00] US. And so far, it seems like its base of mostly younger people haven't seemed too phased about

[00:05:07] larger issues surrounding it. So potential user privacy concerns, a ban or a forced sale.

[00:05:12] What can you tell us about how users have responded to these things?

[00:05:16] Yeah. Many of the concerns that the US government has laid out are more around national security. So

[00:05:22] ways that they believe the Chinese government could lean on ByteDance or TikTok for user data is like

[00:05:28] one type of concern. And that's a concern that for a lot of regular users just doesn't resonate as a

[00:05:35] top of mind fear in their life. And so it makes sense to me that a lot of users are just kind of

[00:05:41] like shrugging in the face of these national security concerns. This has also been going on for so long

[00:05:48] with TikTok, these concerns about its ownership that for users, I think many of them have become

[00:05:53] sort of desensitized. Because back in 2020, we thought TikTok could go away instantly if Trump

[00:05:58] wanted it to. That didn't happen. Coming up, what else 2025 might hold for TikTok? We'll find out

[00:06:05] after the break. What about the other challenges that TikTok has faced this year?

[00:06:21] Slowing growth has been one of kind of the issues for TikTok as a business. And it's sort of an

[00:06:27] expected thing for TikTok to face just, you know, when companies are young and entering a new market,

[00:06:33] they tend to expand really quickly. And so for the first time in TikTok's history,

[00:06:37] user growth has started to stagnate in the US market. And also ad sales have been hitting growth

[00:06:43] targets but not exceeding them. So it's just like in the context of all these geopolitical issues TikTok

[00:06:49] has had to battle, it's interesting to see that the company is also just having to face some of the

[00:06:54] more cut and dry business challenges that other social media companies tend to face

[00:06:58] as they get bigger and run up against competitors.

[00:07:02] Right. Its parent company, ByteDance's valuation, reached $300 billion this year too.

[00:07:08] Any idea what that means for TikTok?

[00:07:11] One of the big questions about ByteDance's valuation is how much this geopolitical risk

[00:07:16] has been weighing on some of its assets. And so TikTok, with all of these question marks surrounding

[00:07:24] it, a lot of investors, they don't know quite how much less it's valued at. But if all of these

[00:07:28] geopolitical issues went away for TikTok, if they found a way to remain in the US that also seemed

[00:07:33] to like satisfy other countries that might have similar concerns, we could expect to see their

[00:07:37] valuation grow even further. But it's a complicated thing for them to sort out.

[00:07:44] And what about elsewhere in the world? Is TikTok facing similar sort of regulations or

[00:07:49] bans outside of the US?

[00:07:51] The Canadian government took a different tact. So they're working on shutting down TikTok's offices

[00:07:56] in Canada while allowing the app to remain for users in the country, which is sort of an interesting

[00:08:03] way of trying to address geopolitical risk. And then previously, years ago, India banned TikTok from

[00:08:11] operating there. And so our understanding with the US market, at least previously, was that TikTok could

[00:08:18] survive without the US market. But if the US market became like a bellwether, like a domino effect among

[00:08:26] other countries and other markets like the EU or the UK or Japan, that then TikTok would have a really

[00:08:34] serious problem on its hands.

[00:08:37] And Georgia, what are you keeping your eye on the most as we head into 2025 around TikTok?

[00:08:42] I'm keeping my eyes squarely on the Supreme Court because they've said they're going to hear the case

[00:08:47] about whether or not TikTok should be banned or have a forced divestiture. And so this is a really

[00:08:53] interesting moment for Americans to watch the Supreme Court kind of grapple with a lot of these kind of

[00:09:00] novel issues. And there are also issues that aren't going to be going away because there's more and more

[00:09:05] popular apps that are coming out of China. And so to hear what the Supreme Court thinks about this ban

[00:09:10] will be really, really interesting.

[00:09:13] That was WSJ reporter Georgia Wells speaking with Bel Lin.

[00:09:16] And that's it for Tech News Briefing. Today's show was produced by me, Julie Chang, with supervising

[00:09:22] producer Catherine Millsop. Thanks for listening.