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Redacted element of a transcript
US Court of Appeals for DC Circuit
Classified

Here’s the transcript of the secret briefing that kicked off the TikTok law

Matt Phillips

It’s hard for Americans — or American politicians — to agree on much of anything these days.

But, following a classified briefing on the potential national security threat posed by TikTok on March 7, the House Energy and Commerce Committee voted unanimously to advance an incredibly contentious legislation that posed a threat to TikTok, one of the most popular forms of communication in the country. (Even after TikTok sent a urgent sounding push alert to its users' phones, directing them to call Congress and generating a flood of calls to Representatives.)

It was a remarkably rapid, unified and some might say courageous decision in a legislative body not known for such things.

The unanimous committee vote gave a jolt of momentum to the bill which passed the next week in a landslide vote by the full house. The Senate passed it the next month and President Biden signed it soon afterward.

Remarkably, we now have a transcript of that classified March 7 meeting that supercharged the journey of that bill into law.

Read the transcript here.

TikTok and its parent are fighting the law in court. And as part of that civil litigation, the government filed yesterday, a heavily redacted transcript of the briefing which was delivered, in part, by a representative of the Office of the Director of National Intelligence — identified only as Jonathan — and David Newman, a national security official at the Department of Justice, as well as others.

As you might imagine, the government has taken pains to efface any blockbuster revelations that might have been included in the classified testimony. Several pages are nothing more than large black rectangles. Elsewhere, there are merely tantalizing hints of what was said.

But in its court filing introducing the transcript, the government stressed that even providing this level of disclosure of a classified briefing is highly unusual. They argued, essentially, that the government was bending over backward to provide some transparency because of the stakes of the case.

“The government is unaware of any past circumstance in which classified testimony by the intelligence community at a classified hearing before Congress has been shared with a court for consideration in connection with civil litigation,” wrote Justice Department attorneys.

The disclosures — or lack of disclosure, depending on your perspective — reflect the unusual nature of the limited access to classified information in this case. Those limits pertain not only to the public, but also to TikTok and its attorneys which are not allowed to see the classified material either.

Unlike in a criminal case, where a defendant has some rights to see the classified evidence being presented against them, TikTok’s efforts to fight the ban is a civil matter, where it has no rights to see such classified material, says Alan Rozenshtein, an associate professor of Law at the University of Minnesota Law School and a senior editor at Lawfare, the national security law publication.

“The court is being asked to uphold this law on the basis of evidence that it cannot disclose to the litigants or to the public,” he said.

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Ives says he’s “relatively disappointed” in the price point of lower-cost Tesla models

On Tuesday, Tesla unveiled its long-awaited lower-cost cars, which turned out to be downgraded versions of the existing Model Y and Model 3. Tesla bull and Wedbush Securities analyst Dan Ives wasn’t particularly impressed with the price point, noting that it’s “still relatively high versus other vehicles on the market.”

The Model Y Standard and Model 3 Standard cost about $40,000 and $37,000, respectively. That’s more than the Model Y Premium and Model 3 Premium — what previous editions (or “trim levels”) are now called — cost last month, before the US federal government’s $7,500 tax credit expired. And the Standard models are missing a lot of Premium features, including Autopilot, second-row screens, and Tesla’s iconic glass roofs, among numerous other downgrades.

In other words, Tesla buyers will now be paying more for less, in what amounts to car-sized shrinkflation.

The stock closed down 4.5% yesterday on the news.

Ives doesn’t think it’s the end of the world but is “disappointed” in the price tag:

“We believe the launch of a lower cost model represents the first step to getting back to a ~500k quarterly delivery run-rate which will be important to stimulate demand for its fleet with the EV tax credit expiring at the end of September but we are relatively disappointed with this launch as the price point is only $5k lower than prior Model 3’s and Y’s.”

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Nvidia helps boost xAI funding round to $20 billion

xAI’s latest funding round has now doubled to $20 billion from $10 billion a month ago, thanks in part to backing from Nvidia, which invested $2 billion in the equity portion of the transaction, Bloomberg reports. In an interview with CNBC, Nvidia CEO Jensen Huang confirmed the investment, adding that his “only regret” was that he didn’t give xAI more money.

The mix of $7.5 billion in equity and $12.5 billion in debt will finance a special purpose vehicle that will purchase Nvidia chips that xAI will then rent. It’s one of many circular AI deals these days that’s contributing to chatter over an AI bubble by some, while being seen by others as a rational way for industry leaders to boost the potential size of the addressable market and lift their longer-term prospects in the process.

Investors in Elon Musk’s other company, Tesla, will vote next month at the company’s annual shareholder meeting on whether to invest in xAI as well — an outcome Musk has he said supports.

The mix of $7.5 billion in equity and $12.5 billion in debt will finance a special purpose vehicle that will purchase Nvidia chips that xAI will then rent. It’s one of many circular AI deals these days that’s contributing to chatter over an AI bubble by some, while being seen by others as a rational way for industry leaders to boost the potential size of the addressable market and lift their longer-term prospects in the process.

Investors in Elon Musk’s other company, Tesla, will vote next month at the company’s annual shareholder meeting on whether to invest in xAI as well — an outcome Musk has he said supports.

$1T

In the past few weeks, OpenAI has announced a flurry of massive deals with Oracle, Nvidia, CoreWeave, AMD, and others as hundreds of billions fly between technology partners racing to expand AI infrastructure at unprecedented scale. The Financial Times tallied it all up and found that the company has signed about $1 trillion worth of deals, and it isn’t clear at all that it will be able to fund them.

The “circular” nature of some of these arrangements is also one factor playing into fears that we’re in an AI bubble.

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Tesla abandoned plans to make thousands of Optimus robots this year

At the start of this year, Tesla CEO Elon Musk said on an earnings call that his company planned to build 10,000 Optimus robots for internal use in 2025. On that same call, he hedged and said he thought the company would definitely build “several thousand” of the bots and that they would “be doing useful things by the end of the year.” Tesla apparently abandoned those plans this summer, according to new reporting from The Information, amid “difficulty Tesla has had with the hands for the robots” and other problems.

The importance of Optimus to Tesla has skyrocketed as sales of the company’s EVs have fallen. Last month, Musk said Optimus would some day amount to 80% of the value of Tesla.

Musk, who has been continually sharing videos of Optimus on X, reportedly hopes to impress investors next month at the company’s annual shareholder meeting with a “dancing troupe of Optimus bots.”

The importance of Optimus to Tesla has skyrocketed as sales of the company’s EVs have fallen. Last month, Musk said Optimus would some day amount to 80% of the value of Tesla.

Musk, who has been continually sharing videos of Optimus on X, reportedly hopes to impress investors next month at the company’s annual shareholder meeting with a “dancing troupe of Optimus bots.”

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