In response to growing concerns about data security, TikTok ‘s US operations are undergoing a fundamental transformation. A new structure is taking shape in which US technology and investment giants, including Oracle, Silver Lake and Andreessen Horowitz, will take on key roles in the management and oversight of the platform. The aim is to separate the US part of the business from its Chinese parent company, ByteDance.
At the heart of the new architecture is the establishment of TikTok Global, which will be responsible for serving millions of users in the US. According to the plan, US investors will own the majority of shares in it and its board will be dominated by Americans.
Importantly, one seat on the board is to be reserved for a US government-designated representative to provide an additional level of oversight.
A key element of the agreement is Oracle’s role. The conglomerate will not only become a significant shareholder, but, above all, will assume responsibility for the storage and processing of US user data.
The entire data infrastructure is to be located in Oracle’s data centres in Texas, as part of an initiative known as ‘Project Texas’.
This is to physically and logically isolate the data from access by the Chinese ByteDance, thus addressing the US administration’s main concerns.
While the details of the agreement between Washington and Beijing are still being worked out, the direction of change is clear. TikTok is preparing to migrate users to a new, dedicated app that will run on a separate algorithm and data system.
This structure is intended to reconcile business interests with national security requirements. By giving more time to finalise the deal by postponing the divestment of Chinese assets, the US president is signalling a willingness to find a lasting solution that will allow TikTok to continue operating in one of its most important markets.
The whole process shows how geopolitics is increasingly shaping the global technology market.
