Managing Editor’s Note: While everyone has been focusing exclusively on Nvidia and other AI stocks…
We believe President Trump is about to trigger a new boom in another area of the AI market – AI coins. We believe the upside potential here is mind-blowing. Many of these coins are trading for a few dollars or even cents on the dollar.
That’s why Jeff is airing an event – AI Supercharged – next Wednesday, September 24, at 8 p.m. ET. You can go here to automatically add your name to the attendees’ list.
Jeff’s getting into all the details as well as discussing his top five AI coins for this new crypto boom. He’ll also give away the name of a coin that just announced a partnership with the U.S. government. Just go here to sign up with one click.
It’s one of the most interesting geopolitical scandals of the last decade.
Mired in spy craft, data surveillance, manipulations of minors and adults alike, election interference, and information warfare…
It’s a story worthy of a bestseller.
But sadly, it’s all true.
And unfortunately, due to the powerful forces at work, most still don’t understand the significance of what has been done to us using this single social media application…
TikTok.
Beijing, China-based parent company, ByteDance, launched TikTok in 2017.
Its mindless, video-based user interface resulted in it becoming the fastest social media application to reach 1 billion users.
TikTok’s prevalence in the U.S. grew like wildfire in 2018 – when ByteDance integrated TikTok with lip-syncing app Musical.ly, which it acquired in 2017. It was a smart way to seed the U.S. market with users.
It worked. Today, there are about 170 million U.S. users of TikTok, 82.2 million of whom use TikTok daily. Clearly, it is one of the most popular smartphone apps of all time.
But there is one major problem…
TikTok is the Chinese government’s most powerful tool to carry out information warfare… and one of the largest psychological operations against its allies in history.
I began to be concerned in 2018 when ByteDance got caught red-handed violating child privacy laws in the U.S. ByteDance was surveilling on and collecting data on children… and sending it back to Beijing.
For its violations, ByteDance agreed to pay a $5.7 million fine to the U.S. Federal Trade Commission (FTC) in early 2019, which got very little press despite the serious nature of the crime.
ByteDance then demonstrated that it had no regard for U.S. laws, or those in the European Union, for that matter, by expanding its data surveillance efforts far beyond what it had been doing at the time of its fine by the FTC.
In 2020, security researchers discovered the extent to which ByteDance was using TikTok to surveil and collect extensive data on U.S. citizens… before sending that back to Beijing.
ByteDance is required by law to provide access to any data that it collects to the Chinese Communist Party.
I wrote about those revelations in July 2020 in The Bleeding Edge – TikTok’s Data Collection Poses Security and Privacy Risk.
Back then, I wrote:
TikTok is owned by Chinese company ByteDance. We mentioned last month that ByteDance was fined for violating child privacy laws in the United States. That’s why I said I would not be comfortable with my children using it.
It turns out that TikTok is even worse than I thought…
A researcher reverse-engineered TikTok and determined exactly what information was being sent back to ByteDance.
The app collects everything about a user’s phone. It documents the phone’s hardware specs and every app that’s been downloaded. It pings the phone’s GPS location roughly every 30 seconds. That means TikTok tracks exactly where all its users are at all times.
TikTok also knows which Wi-Fi networks its users connect to. It documents the address of the router as well as every other device connected to each network.
And if that wasn’t scary enough, TikTok has written its software code to allow it to potentially download software to Android phones and then run that software without the user’s knowledge or consent. The software could be anything, like malware or surveillance software. That’s not just unethical… That’s illegal.
And where does the information go after it has been collected? Back to China.
Perhaps, not surprisingly, the data collected by China using TikTok is far worse than what was known back then.
In addition to what I listed above, TikTok has been used to collect biometrics like facial scans and voice prints, your entire browsing history, your text messages, and worse…
The TikTok application – which acts like malware – can even act as a keylogger, which can record the users’ input of passwords to personal accounts.
If that doesn’t make you deeply uncomfortable, it gets worse.
TikTok, and other social media platforms, are flooded with bots and accounts that are controlled by employees of China government-controlled “companies,” whose purpose is to conduct psychological warfare operations – or psyops – on the U.S. population.
They do this by pushing divisive messages, misinformation, and political narratives designed to weaken the U.S. and influence elections – at best.
Worst is the target of the long game – our children – which I wrote about in Outer Limits – One of the Largest PsyOps in History…
In particular, China’s focus is on the most naïve demographic in the U.S.: children and Gen Z’ers (those born between 1997–2012).
In great contrast to what TikTok looks like in the U.S., we might be surprised to hear that in China, the domestic version of TikTok is different than what is pushed around the world.
In China, TikTok limits children to just 40 minutes a day. And TikTok is used to show kids videos of science experiments that can be done at home, educational videos, patriotism videos, and videos of museum exhibits, as just a few examples.
China has been systemically clever and nefarious in using TikTok. It’s playing the long game to manipulate the youngest and most naïve in Western society, as a way to influence culture and elections, as well as weaken the populations of its adversaries by pushing poison into younger generations that will impact their careers and life decisions.
The Center for Countering Digital Hate discovered that TikTok systematically pushes videos about eating disorders and self-harm to children. It’s aggressive, too. The research found that TikTok feeds this junk to kids every 39 seconds.
And yet, more than half of all Gen Z’ers now want to become a social media influencer rather than a doctor, scientist, engineer, AI specialist, physicist, or any number of career choices that would be beneficial to society.
This is by design.
TikTok, in China, is actually known as Douyin. It is a Chinese Communist Party-approved domestic application, and it is nothing like TikTok.
These developments are what led to talks of banning TikTok in the U.S. and many other countries.
They also led to the bipartisan act in the U.S., HR 7521 – Protecting Americans from Foreign Adversary Controlled Applications Act, which has already been passed by the House of Representatives.
Representative Raja Krishnamoorthi (D-IL) summed it up pretty well:
So long as it is owned by ByteDance and thus required to collaborate with the CCP, TikTok poses critical threats to our national security. Our bipartisan legislation would protect American social media users by driving the divestment of foreign adversary-controlled apps to ensure that Americans are protected from the digital surveillance and influence operations of regimes that could weaponize their personal data against them. Whether it’s Russia or the CCP, this bill ensures the President has the tools he needs to press dangerous apps to divest and defend Americans’ security and privacy against our adversaries[.]
The purpose of HR 7521 was made very clear to the Chinese Communist Party and ByteDance: Either divest control of TikTok in the U.S… or face a ban of the application in the United States.
Sadly, nothing has been done to address this widespread, population-scale psyops in the U.S. by its number one adversary since the discoveries back in 2020.
Fortunately, something is being done about it now.
The news out last night indicates that a deal has been agreed to between the U.S. government and the Chinese government regarding the divestiture of control of TikTok in the U.S.
Namely, Oracle (corporate, cloud service provider), Silver Lake (private equity), and Andreessen Horowitz (venture capital) will likely take ownership of 80% of TikTok and full operational control over the technology and the business in the U.S.
TikTok reportedly has been building a new version of TikTok in the U.S., which would need to undergo extensive security testing and analysis for backdoors, keyloggers, and malware.
But the idea is that the technology would be controlled by the new ownership in the U.S., no data will be sent to the Chinese Communist Party or ByteDance, and the new American owners will have the ability to clean up the platform of its China psyops efforts.
If anyone thinks this resolution is unfair, consider this:
China’s government bans the use of TikTok within China’s borders. Period. China’s “great firewall” prohibits Chinese citizens from using the application, which is available everywhere else in the world.
As mentioned earlier, ByteDance has its own domestic app known as Douyin, but it is nothing like TikTok. Douyin promotes educational content for children and adults, state propaganda, videos on Chinese traditional culture, and has e-commerce capabilities.
It feeds educational content and culture in China, and it feeds psyops, division, and hatred to its number one adversary’s population.
Can you see what’s happening now?
The media has been so horrible with its coverage of the talk of a ban of TikTok, claiming it was an “attack on freedom of speech,” and “an assault” on the younger population’s platform where “they can be heard.”
The failure to acknowledge the massive psyops campaign and national security risk has been disgusting and a failure of journalism.
And the most obvious purpose of the threat of a potential ban was missed by most… to bring Beijing to the table to force negotiations for a divestiture of control of TikTok in the U.S. market.
It worked. A deal will be finalized. Will it be good? I’m not sure yet…
I’ll hope for the best, but until then, I’ll never use TikTok, nor will my children.
Jeff
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
