Chapter 1: How is TikTok's ownership changing and why does it matter?
American and Middle Eastern new ownership is on the way for TikTok USA. I'm David Brancaccio in Los Angeles. TikTok's long-awaited split from its China-based owner is now in motion after its parent company ByteDance signed a binding agreement to hand over control of the U.S. operations of the popular social media platform to a group led by the database firm Oracle.
Lily Jamali is tech correspondent for our partners at the BBC. The deal, brokered in part by the White House, is meant to put TikTok in compliance with a US law passed last year that required its American arm to be banned if it wasn't sold. US lawmakers expressed concerns that ByteDance's ties to Beijing meant it could potentially control the content fed to American users by TikTok's algorithm.
TikTok has denied those allegations. The deal is expected to close on the 22nd of January. Under the agreement, Oracle, the private equity group Silver Lake, and Abu Dhabi-based MGX will hold an 80.1% stake in the new TikTok-USDS, while ByteDance of China will hold on to 19.9%. China's antitrust regulators still will have a say in this.
We'll learn how many used homes and apartments were sold in November later this morning. People with older, lower mortgages aren't selling much, and low inventory and medium-high mortgage rates are keeping buyers locked out. Now that's the national picture. Marketplace's Amy Scott now looks at variations by region. Austin, Texas, was the poster child of the pandemic-era housing boom.
But Crystal Shaw with Roots Residential Group says today it's a buyer's market. Sales have slowed, prices have fallen, and sellers are making concessions, like doing repairs or buying down interest rates. Ultimately, for affordability in Austin, it is a good thing that prices have readjusted. In Cleveland, Ohio, it's a different story.
Longtime agent Doxy Jelks says the traditionally more affordable market continues to attract plenty of demand. It's still a seller's market here in Cleveland. If it's priced right, looks good, it goes fast with multiple offers. Though she does see some houses staying on the market longer.
For a more balanced market, look to Jacksonville, Florida, where Watson Realty president Bill Watson says demand and supply are pretty well matched.
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Chapter 2: What impact do data centers have on electricity prices?
It means the sellers are not getting everything they demand. The buyers may not get everything they want either. which he says is ultimately healthier than one side having all the power. A more balanced market could be coming to a neighborhood near you. Nationally, Realtor.com is predicting next year we'll see the most balanced market in about a decade. I'm Amy Scott for Marketplace.
Among the many rising prices pressuring consumers, electricity prices up 6.9 percent year over year, much higher than overall inflation. And costs will rise more with increased demand from AI, crypto and so many other flavors of data centers which gorge on electricity.
This week, three Democrats in the Senate said they're opening an investigation into tech firms and how their power demands are hitting our electric bills. Marketplace's senior Washington correspondent, Kimberly Adams, reports. What we do know is that all the new data centers coming online use a lot of electricity.
We also know that local utilities are building or upgrading their infrastructure, which is expensive. Utilities are building billions of dollars of infrastructure and then spreading those costs to everyone. Ari Pesko is the director of the Electricity Law Initiative at Harvard. Electricity prices are now a national issue.
There are several reasons why prices are going up across the country, and I think data centers are certainly one reason. I think they're a nice political target. Pesco and others have done research arguing big tech firms aren't paying their fair share of the costs of upgrading the electric grid, driving up the bills for everyone else.
But when it comes to the direct impact of data centers, says Jeff Hebertson, lead renewables analyst at Ristad Energy, We know that infrastructure is placing upward pressure on power pricing, but it's really hard to say exactly how much that's weighted towards that. Rystad predicts data centers are very likely to contribute to higher prices in the future, like by 2030.
But right now, when it comes to the costs of utility upgrades... Is the transmission upgrade due to wildfire risk that we're seeing in California? Or is the transmission price increase related to a data center that's being installed in Virginia or Texas? That is very unclear right now.
According to some of the tech firms, the infrastructure that comes along with a data center can sometimes even lower customer prices.
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Chapter 3: Why are Senate Democrats investigating tech firms and their energy usage?
Kush Patel is a senior partner at Energy Environmental Economics, which recently did a study for Amazon on how some of its data centers were affecting residential prices. Our perspective is that those impacts are real, but how it actually impacts individual customers is quite varied and nuanced and it's not really a clean story. What kind of upgrades are necessary? Who's paying for them?
Is the facility getting subsidized power or not? How it impacts a customer in Virginia is going to be a lot different than in Jersey or California. How much a data center coming to your town will affect your electricity bill often depends on whatever deal the tech firm struck with the local utility. Those contracts tend to be confidential.
But the senators want to know what's in them, and they're calling for a response from tech firms by January 12th. In Washington, I'm Kimberly Adams for Marketplace. Your Marketplace listening this week has turned you into the go-to person in the room on matters economic. Feel the satisfaction of confirming your superior knowledge by taking our weekly Marketplace News Quiz.
There's a new way to do that this week. Marketplace.org reveals all. Now, ahead of that, let's try one here. What does a fusion power company have to do with President Trump's social media company? One of the biggest business stories of the week, TAE Technologies. Ring any bells? Sally and Bangor, you did it. Nicely done.
Chapter 4: How are local utilities responding to the demands of new data centers?
In Los Angeles, I'm David Brancaccio, Marketplace Morning Report. From APM, American Public Media.