The AI Startups Rising Higher As TikTok's Regulatory Challenges Mount

Overview

Generative AI startups have been increasing in demand for the last couple of years due to the rising adoption of AI-generated content in various industries. The recent congressional hearing on the matter of banning TikTok could potentially impact these startups, especially those that rely on TikTok either for customer acquisition or data training purposes. However, the potential ban on TikTok also brings to light numerous opportunities for startups to capitalize on filling the possible gap in the short-form video market. Moreover, cybersecurity and fraud prevention startups can focus on addressing data privacy and security which is the main catalyst behind TikTok’s potential ban in the US. 

Potential areas to explore if Tiktok is banned

Privacy-focused social media platforms: Startups can develop platforms that prioritize user privacy and data.

• For example, the Indian short-term video platform Chingari had over 1 million downloads overnight following the TikTok ban in India

Content Moderations Tools: Startups can develop AI-based content moderation tools to help social media platforms to remove harmful and inappropriate content, addressing concerns of misinformation and harmful content that were also the reason for the potential Tiktok ban in the US.

• For example companies like Reality Defender (YC W22) which develops deep fake detection using AI to flag fraudulent users and content for enterprises

Fraud prevention and Identity verification: As the possible gap might emergy from the potential ban on TikTok, startups can offer solutions that help detect fake accounts and fraud, enhancing the overall security of these platforms

• For example, YC startups such as Veriff (YC W18) offers AI-powered solution to verify customers’ identity to prevent fraud.

Content Creation Tools: Since Tiktok also offers video editing tools within the app, After its potential, startups can explore this opportunity and develop tools and applications that enable users to create and edit short-form videos with ease.

• For example, QuickVid.ai (YC W22) offers a solution to create quick Youtube shorts which could expand its scope outside Youtube and make it an all-purpose solution for creating short-form videos

Influencer marketing platforms: As influencers look for alternative platforms to grow their presence and monetize their content, startups can develop platforms that connect influencers with brands for marketing and advertising purposes.

• Examples such as 1stCollab (YC W23), a YC startup that provides an influencer marketing solution, could see a future increase in demand after the potential TikTok ban.

To conclude, while the TikTok ban could impact generative AI startups, the overall market demand for these technologies is still growing at an immense pace. There are many other alternative sources of data or customers for these startups to explore. These startups can even take a step further and develop an alternative to the TikTok app with a focus on data privacy and security. Further, As investors or shareholders, it is important to monitor the market closely and explore potential opportunities that might rise along the way, since the outcome of the hearing is uncertain.

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