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TikTok's download ban blocked by judge, but November 12 broader ban looms

The ban on TikTok downloads was blocked by a judge, but the broader ban on November 12 still looms. Geopolitical Futurist Abishur Prakash joins the On the Move panel to discuss.

Video Transcript

AKIKO FUJITA: The ban on social media app TikTok has been extended yet again in the US. A federal judge stepped in to halt the Trump administration's order just hours before Google and App were set to remove the popular app from their app stores, buying parent company ByteDance more time to draw out a deal with Oracle and Walmart. Let's bring in Abishur Prakash. He is a geopolitical futurist who's been tracking this case very closely for us. Abishur, it's great to have you on today. I think there's a lot--

ABISHUR PRAKASH: Thanks for having me.

AKIKO FUJITA: --of people who are following this saying, where does this all leave us? Because we've still got the November 12 deadline on the table here to completely ban TikTok. We've got an extension as a result of this order. Where does that leave us in the dealmaking?

ABISHUR PRAKASH: Well, we're really pushing things back more. Last Sunday there was an injunction to WeChat from being banned. And just yesterday it was TikTok.

But there's really no clarity yet as to whether the deal between TikTok, Oracle, and Walmart will even be approved by CFIUS and whether or not China will approve the deal. Because as of right now, ByteDance will still retain control of the algorithm, which as you know, is at the heart of TikTok.

- I also want to touch on the SMIC ban that we're seeing, or the talk in the US of an SMIC ban, basically the chip-maker in China and how reliant they are on foreign technologies to really allow them to build out the chips that they need. How much of a blow is this going to be to China's nascent chip industry. And what kind of retaliation do you think the US can expect as a result of this not necessarily ban, but I guess, roadblock?

ABISHUR PRAKASH: Well, this is really a nuclear card that the US has played. Because unlike Huawei or even TikTok, which our companies, SMIC is really a foundation. It's a foundation for China to build self-driving cars, advanced smartphones, AI, autonomous capabilities within its military, space technologies.

So we're really talking about a company that's expected, or was expected, to power the next era of China. And now the US has really targeted the heart of that. So the ball now is in China's court as to how much pressure does it now want to put on the US.

- Abishur, this is Ines here. Is this just the beginning? Are we just scratching the surface when it comes to this fight over tech? I mean, how will this play out for other companies-- Chinese companies looking to go public, American firms in China?

ABISHUR PRAKASH: Well, this is the new status quo geopolitics. Tech is now driving things. And there's an entire cohort of next-generation Chinese technology firms who are watching what's happening with their quote, unquote "big brothers" like Huawei and TikTok, and are realizing that they now have to operate by a different set of business rules that are being essentially defined by geopolitics and geo-economic competition.

And that means that these companies, the corporate strategies may change. Instead of investing most of their resources and time in the West, the key battlefields may now be in Africa, parts of Asia, and parts of South. America

AKIKO FUJITA: I mean, Abishur, you could argue that's already happening. Especially when you look at emerging markets like India, we have seen the Alibabas and the Googles of the world really fighting it out over the last several years. When you talk about the unpredictability of foreign companies who do business here in the US under the administration, how far do you think of national privacy policy would go to at least address the concerns so there is some kind of template in place for foreign companies like a ByteDance that are looking to enter the US?

ABISHUR PRAKASH: Well, if we look at the deal between TikTok and Oracle and Walmart, a key focus of that deal is data. Where will be data be stored? And it's right now, as the deal itself, it'll be stored in the US.

But the key challenge here is that the algorithm is still in China. So no matter what kind of privacy template and guidance there may be, companies are now operating in what's best for their countries. Governments are behaving in more nationalistic ways than ever before. And there's no incentive to really play ball by either side.

So even in this case, if TikTok has to still work, the data has to leave the US at some point to be analyzed by the algorithm. So you can see the gray areas surrounding anything to do with privacy.

AKIKO FUJITA: But, Abishur, it looks like that the US is essentially taking a page out of China's playbook when you look at what they are trying to achieve through TikTok. You're talking about data localization is one issue. Is that what we're headed towards?

ABISHUR PRAKASH: It's a new era where the US is essentially doing to Chinese firms what China has been doing to American firms. And this creates the space for the US to behave in more of a protectionist manner instead of a less of a rules-based playing field. And the question in front of American companies should now be that if America is going to play this way with China, how is China going to play with, let's say, IBM or Apple.

- Abishur, what other technology firms or other technologies could we expect to then see fall into this kind of cold war, economic cold war more or less, between the US and China? Do we think more firms are going to be struck? And do you think some of the big-name tech firms here in the US are going to be hurt in China through sales?

ABISHUR PRAKASH: Well, right now we've seen two key technologies enter the tech war, 5G and now chips. I think we're also going to end up seeing industrial robots. Because there is a huge set of tensions brewing between the EU, where a lot of industrial robotics companies are based, and China.

We're also going to see venture capital come under increased scrutiny. And on top of that, you have space. You have anything to do with space where both of these countries are competing.

As for how China is going to respond, a key difference to keep in mind is that America taking this step towards SMIC doesn't necessarily affect many American companies. But if China were now to take steps against Apple or IBM, it now is losing access to critical technologies, jobs, investment. So China has to play and look at things from both sides.

AKIKO FUJITA: Abishur Prakash, a geopolitical futurist joining us from Toronto. Some good insight there. I appreciate your time today.

ABISHUR PRAKASH: Thanks for having me.