TikTok confirmed Wednesday that U.S. officials have recommended the popular video-sharing app part ways with its Chinese parent ByteDance to avoid a national ban.

Western powers, including the European Union and the United States, have been taking an increasingly tough approach to the app, citing fears that user data could be used or abused by Chinese officials.

“If protecting national security is the objective, calls for a ban or divestment are unnecessary, as neither option solves the broader industry issues of data access and transfer,” a TikTok spokesperson told AFP.

“We remain confident that the best path forward to addressing concerns about national security is transparent, U.S.-based protection of U.S. user data and systems, with robust third-party monitoring, vetting, and verification.”

The Wall Street Journal and other U.S. news outlets on Wednesday reported that the White House set an ultimatum: if TikTok remains a part of ByteDance, it will be banned in the United States.

“This is all a game of high stakes poker,” Wedbush analyst Dan Ives said in a note to investors.

Washington is “clearly… putting more pressure on ByteDance to strategically sell this key asset in a major move that could have significant ripple impacts,” he continued.

The White House last week welcomed a bill introduced in the U.S. Senate that would allow President Joe Biden to ban TikTok.

The bipartisan bill “would empower the United States government to prevent certain foreign governments from exploiting technology services… in a way that poses risks to Americans’ sensitive data and our national security,” Biden’s national security adviser, Jake Sullivan, said in a statement.

The bill’s introduction and its quick White House backing accelerated the political momentum against TikTok, which is also the target of a separate piece of legislation in the U.S. House of Representatives.

Appearing tough on China is one of the rare issues with potential for bipartisan support in both the Republican-run House and the Senate, where Biden’s Democratic Party holds the majority.

Concern ramped up among American officials earlier this year after a Chinese balloon, which Washington alleged was on a spy mission, flew over U.S. airspace.

TikTok use rocketing

TikTok claims it has more than a billion users worldwide including over 100 million in the United States, where it has become a cultural force, especially among young people.

Activists argue a ban would be an attack on free speech and stifle the export of American culture and values to TikTok users around the world.

U.S. government workers in January were banned from installing TikTok on their government-issued devices.

Civil servants in the European Union and Canada are also barred from downloading the app on their work devices.

According to the Journal report, the ultimatum to TikTok came from the U.S. interagency board charged with assessing risks foreign investments represent to national security.

U.S. officials declined to comment on the report.

TikTok has consistently denied sharing data with Chinese officials and says it has been working with the U.S. authorities for more than two years to address national security concerns.

Time spent by users on TikTok has surpassed that spent on YouTube, Facebook, Instagram or Twitter and is closing in on streaming television titan Netflix, according to market tracker Insider Intelligence.
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Moonwalking astronauts will have sleeker, more flexible spacesuits that come in different sizes when they step onto the lunar surface later this decade. 

Exactly what that looks like remained under wraps. The company designing the next-generation spacesuits, Axiom Space, said Wednesday that it plans to have new versions for training purposes for NASA later this summer. 

The moonsuits will be white like they were during NASA’s Apollo program more than a half-century ago, according to the company. That’s so they can reflect heat and keep future moonwalkers cool. 

The suits will provide greater flexibility and more protection from the moon’s harsh environment, and will come in a wider range of sizes, according to the Houston-based company. 

NASA awarded Axiom Space a $228.5 million contract to provide the outfits for the first moon landing in more than 50 years. The space agency is targeting late 2025 at the earliest to land two astronauts on the moon’s south pole. 

At Wednesday’s event in Houston, an Axiom employee modeled a dark spacesuit, doing squats and twisting at the waist to demonstrate its flexibility. The company said the final version will be different, including the color. 

“I didn’t want anybody to get that mixed up,” said Axiom’s Russell Ralston. 
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From 5G infrastructure to mobile phones and more, Chinese technologies are used in many parts of the world. It’s part of China’s Digital Silk Road initiative, which is getting mixed reviews: welcomed by some countries, while others are assessing the potential risks of Chinese technology. VOA’s Elizabeth Lee explains. Camera: Henry Ridgwell, Adam Greenbaum
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Facebook-parent Meta Platforms said on Tuesday it would cut 10,000 jobs, just four months after it let go 11,000 employees, the first Big Tech company to announce a second round of mass layoffs. 

“We expect to reduce our team size by around 10,000 people and to close around 5,000 additional open roles that we haven’t yet hired,” Chief Executive Officer Mark Zuckerberg said in a message to staff.  

The layoffs are part of a wider restructuring at Meta that will see the company flatten its organizational structure, cancel lower priority projects and reduce its hiring rates as part of the move. The news sent Meta’s shares up 2% in premarket trading. 

The move underscores Zuckerberg’s push to turn 2023 into the “Year of Efficiency” with promised cost cuts of $5 billion in expenses to between $89 billion and $95 billion. 

A deteriorating economy has brought about a series of mass job cuts across corporate America: from Wall Street banks such as Goldman Sachs and Morgan Stanley to Big Tech firms including Amazon.com  and Microsoft.  

The tech industry has laid off more than 280,000 workers since the start of 2022, with about 40% of them coming this year, according to layoffs tracking site layoffs.fyi.  

Meta, which is pouring billions of dollars to build the futuristic metaverse, has struggled with a post-pandemic slump in advertising spending from companies facing high inflation and rising interest rates.  

Meta’s move in November to slash headcount by 13% marked the first mass layoffs in its 18-year history. Its headcount stood at 86,482 at 2022-end, up 20% from a year ago. 
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Silicon Valley Bank’s collapse rattled the technology industry that had been the bank’s backbone, leaving shell-shocked entrepreneurs thankful for the government reprieve that saved their money while they mourned the loss of a place that served as a chummy club of innovation.

“They were the gold standard, it almost seemed weird if you were in tech and didn’t have a Silicon Valley Bank account,” Stefan Kalb, CEO of Seattle startup Shelf Engine, said during a Monday interview as he started the process of transferring millions of dollars to other banks.

The Biden administration’s move guaranteeing all Silicon Valley Bank’s deposits above the insured limit of $250,000 per account resulted in a “palpable sigh of relief” in Israel, where its booming tech sector is “connected with an umbilical cord to Silicon Valley,” said Jon Medved, founder of the Israeli venture capital crowdfunding platform OurCrowd.

But the gratitude for the deposit guarantees that will allow thousands of tech startups to continue to pay their workers and other bills was mixed with moments of reflection among entrepreneurs and venture capital partners rattled by Silicon Valley Bank’s downfall.

The crisis “has forced every company to reassess their banking arrangements and the companies that they work with,” said Rajeeb Dey, CEO of London-based startup Learnerbly, a platform for workplace learning.

Entrepreneurs who had deposited all their startups’ money in Silicon Valley Bank are now realizing it makes more sense to spread their funds across several institutions, with the biggest banks considered safer harbors.

Kalb started off Monday by opening an account at the largest in the U.S., JP Morgan Chase, which has about $2.4 trillion in deposits. That’s 13 times more than the deposits at Silicon Valley Bank, the 16th largest in the U.S.

Bank of America is getting some of the money that Electric Era had deposited at Silicon Valley Bank, and the Seattle startup’s CEO, Quincy Lee, expects having no difficulty finding other candidates to keep the rest of his company’s money as part of its diversification plan.

“Any bank is happy to take a startup’s money,” Lee said.

Even so, there are fears it will be more difficult to finance the inherently risky ideas underlying tech startups that became a specialty of Silicon Valley Bank since its founding over a poker game in 1983, just as the advent of the personal computer and faster microprocessors unleashed more innovation.

Silicon Valley quickly established itself as the “go-to” spot for venture capitalists looking for financial partners more open to unconventional business proposals than its bigger, more established peers who still didn’t have a good grasp of technology.

“They understood startups, they understood venture capital,” said Leah Ellis, CEO and co-founder of Sublime Systems, a company in Somerville, Massachusetts, commercializing a process to make low-carbon cement. “They were woven into the fabric of the startup community that I’m part of, so banking with SVB was a no brainer.”

Venture capitalists set up their accounts at Silicon Valley Bank just as the tech industry started its boom and then advised the entrepreneurs that they funded to do the same.

That cozy relationship came to an end when the bank disclosed a $1.8 billion loss on low-yielding bonds that were purchased before interest rates began to spike last year, raising alarms among its financially savvy customer base who used the fruits of technology to spread warnings that turned into a calamitous run on deposits.

Bob Ackerman, founder and managing director of venture funder AllegisCyber Capital, likened last week’s flood of withdrawal demands from Silicon Valley Bank to a self-inflicted wound by “a circular firing squad” intent on “shooting your best friend.”

Many of Silicon Valley Bank’s roughly 8,500 employees now find themselves hanging in limbo, too, even though government regulators now overseeing the operations have told them they will be offered jobs at 1.5 times their salaries for 45 days, said Rob McMillan, who had worked there for 32 years.

“We don’t know who’s going to pay us when,” McMillan said. “I think we all missed a paycheck. We don’t know if we have benefits.”

Even though all of Silicon Valley Bank’s depositors are being made whole, its demise is expected to leave a void in the technology sector that may be difficult to fill. In an essay that he posted on his LinkedIn page, prominent venture capitalist Michael Moritz compared Silicon Valley Bank to a “cherished local market where people behind the counters know the names of their customers, have a ready smile but still charge the going price when they sell a cut of meat.”

Silicon Valley Bank is fading away at a time when startups were already having a tougher go at raising money, with a downturn in technology stock values and a steady ride in interest rates caused venture capitalists to retrench. The bank often helped fill the financial gaps with one of its specialties — loans known as “venture debt” because it was woven into the funding provided by its venture capitalist customers.

“There’s going to be a lot of great ideas, a lot of great teams that don’t get funding because the barriers to entry are too high or because there are not enough people who are willing to invest,” said William Lin, co-founder of cybersecurity startup Symmetry Systems and a partner at the venture capital firm ForgePoint.

With Silicon Valley Bank gone and venture capitalists pulling in their reins, Lin expects there will be fewer startups getting money to pursue ideas in the same fields of technology. If that happens, he foresees a winnowing of competition that will eventually make the biggest tech companies even stronger than they already are.

“There’s a real day of reckoning coming in the startup world,” predicted Amit Yoran, CEO of the cybersecurity firm Tenable.

That may be true, but entrepreneurs like Lee and Kalb already feel like they had been through an emotional wringer after spending the weekend worrying that all their hard work would go down a drain if they couldn’t get their money out of Silicon Valley Bank.

“It was like being stuck inside a doomsday loop,” Lee said.

Even as he focuses on growing Shelf Engine’s business of helping grocers managing their food orders, he vowed not to forget “a very hard lesson.”

“I obviously now know banks aren’t as safe as I used to think they were,” he said.
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Boeing structural analysis engineer George Ndayizeye, who grew up in Burundi, has won a 2023 Black Engineer of the Year Legacy Award. He spoke with VOA’s Natasha Mozgovaya outside Seattle.
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A global shortage of semiconductor chips in the automotive industry starting in 2020 has motivated many countries to increase their domestic manufacturing. The United States has allocated more than $50 billion to promote semiconductor production and research stateside as the global need for the chips is expected to double over the next decade. Keith Kocinski has more from New York.
Camera: Keith Kocinski and Rendy Wicaksana
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China’s government on Thursday criticized the Netherlands for joining Washington in blocking Chinese access to technology to manufacture advanced processor chips on security and human rights grounds.

A Dutch minister told lawmakers Wednesday that exports of equipment that uses ultraviolet light to etch circuits on chips would be restricted on security grounds. ASML of the Netherlands is the only global supplier. Industry experts say a lack of access to ASML’s most advanced technology is a serious handicap for China’s efforts to develop its own chip industry.

Washington in October blocked Chinese access to U.S. tools to make advanced chips that it said might be used in weapons or in equipment for the ruling Communist Party’s surveillance apparatus. The Biden administration is lobbying European and Asian allies to tighten their own controls.

A Chinese foreign ministry spokeswoman complained that “an individual country,” a reference to the United States, was trying to “safeguard its own hegemony” by abusing national security as an excuse to “deprive China of its right to development.”

“We firmly oppose the Netherlands’s interference and restriction with administrative means of normal economic and trade exchanges between Chinese and Dutch enterprises,” said the spokeswoman, Mao Ning. “We have made complaints to the Dutch side.”

Mao appealed to the Netherlands to “safeguard the stability of the international industrial and supply chain.”

ASML’s extreme-ultraviolet, or EUV, equipment uses light to etch microscopically precise circuits into silicon, allowing them to be packed more closely together. That increases their speed and reduces power demand.

The Dutch government has prohibited ASML from exporting its most advanced machines to China since 2019, but the company is allowed to supply lower-quality systems.

Chinese manufacturers can produce low-end chips used in autos and most consumer electronics but not those used in smartphones, servers and other high-end products.

Dutch Prime Minister Mark Rutte and U.S. President Joe Biden held talks in January on ASML’s chip machines.
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The Netherlands’ government on Wednesday said it planned new restrictions on exports of semiconductor technology to protect national security, joining the United States’ effort to curb chip exports to China. 

The U.S. in October imposed sweeping export restrictions on shipments of American chipmaking tools to China, but for the restrictions to be effective, they need other key suppliers in the Netherlands and Japan, who also oversee key chipmaking technology, to agree. The allied countries have been in talks on the matter for months. 

Dutch Trade Minister Liesje Schreinemacher announced the decision in a letter to parliament, saying the restrictions would be introduced before the summer. 

Her letter did not name China, a key Dutch trading partner, nor did it name ASML Holding NV, Europe’s largest tech firm and a major supplier to semiconductor manufacturers, but both will be affected. It specified one technology that would be affected: “DUV” lithography, the second-most advanced machines that ASML sells to computer chip manufacturers. 

“Because the Netherlands considers it necessary on national security grounds to get this technology into oversight with the greatest of speed, the Cabinet will introduce a national control list,” the letter said. 

ASML said in a response it expected to have to apply for licenses to export the most advanced segment among its DUV machines, but that would not affect its 2023 financial guidance. 

ASML dominates the market for lithography systems, multimillion-dollar machines that use powerful lasers to create the minute circuitry of computer chips. The company expects sales in China to remain about flat at $2.3 billion in 2023 – implying relative shrinkage as the company expects overall sales to grow by 25%. Major ASML customers such as Taiwan Semiconductor Manufacturing Co. and Intel are engaged in capacity expansion. 

ASML has never sold its most advanced “EUV” machines to customers in China, and the bulk of its DUV sales in China go to relatively less advanced chipmakers. Its biggest South Korean customers, Samsung and SK Hynix, both have significant manufacturing capacity in China. 

The Dutch announcement leaves major questions unanswered, including whether ASML will be able to service the more than $8 billion worth of DUV machines it has sold to customers in China since 2014. 

Schreinemacher said the Dutch government had decided on measures “as carefully and precisely as possible … to avoid unnecessary disruption of value chains.” 

“It is for companies of importance to know what they are facing and to have time to adjust to new rules,” she wrote.  

Japan is expected to issue an update on its chip equipment export policies as soon as this week.
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Drones are routinely used in warfare, law enforcement and agriculture. Now more and more U.S. businesses are using them to deliver cookies and coffee right to your front door. VOA’s Julie Taboh has more. Camera: Adam Greenbaum, Chad Baugh 
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