TikTok, a popular short-form video sharing application owned by the Chinese technology company ByteDance, has drawn scrutiny from several countries, including the United States. Two separate initiatives in the United States and Europe, known as Project Texas and Project Clover, have put TikTok’s data center locations and its relationship with Oracle Cloud under particular focus. Concerns revolve around the Chinese government potentially using the platform to obtain Western users’ personal data and the Biden Administration considering a potential ban of the application in the United States altogether.
TikTok’s data center locations span various markets, including Northern Virginia and Hillsboro, Oregon in the United States; Dublin, Ireland, and near the small town of Hamar, Norway in Europe; as well as Singapore and Johor, Malaysia in Asia, among others.
Dgtl Infra delves deeper into how TikTok utilizes data centers worldwide to support its massive user base and enhance security measures. Continue reading to learn about the specifics of TikTok’s data center locations in the United States, Europe, and Asia, the company’s partnership with Oracle Cloud, as well as TikTok’s security initiatives, known as Project Texas and Project Clover. We will also discuss TikTok’s ownership structure and board of directors, providing a clearer picture of the company’s decision-making processes.
How does TikTok use Data Centers?
Data centers are essential for storing, processing, and managing the massive amounts of data generated by TikTok users every day as they watch and share short-form videos. While much of the scrutiny surrounding TikTok focuses on storing its users’ private data, such as phone numbers and birthdates, within its data centers, TikTok also handles much more public data, like videos, bios, and comments, which require data centers as well.
TikTok uses data centers for many purposes beyond just housing the servers and storage equipment responsible for safeguarding user data and content. For instance, data centers process vast amounts of data in real-time, including ranking content, personalizing users’ For You feeds, and delivering targeted ads to users. Data centers also handle the traffic generated by the platform’s millions of daily active users. In short, TikTok utilizes many more data centers than may initially be apparent.
TikTok’s Data Storage in the United States
Before exploring TikTok’s specific data center locations worldwide, it is crucial to gain a deeper understanding of TikTok’s approach to data storage in the United States. Notably, TikTok makes a distinction between what it considers private or protected data and the less sensitive public or business data.
TikTok has long stored U.S. user data in its own data centers in the United States. Currently, TikTok continues to use its U.S. data centers, particularly in Northern Virginia, for backup purposes. However, it has initiated the process of deleting historical protected U.S. user data stored on non-Oracle servers, with the expectation of completing this process sometime in 2023.
Ultimately, TikTok expects to delete U.S. users’ private data from its own data centers and fully pivot to Oracle cloud servers located in the United States. However, despite these commitments from TikTok, several broad exceptions exist that allow large amounts of U.S. user data to routinely leave the country. For example, public and business data will be permitted to regularly leave the United States, as this information does not fall under the definition of private or protected data.
TikTok CEO Shou Chew on Public Data
TikTok’s Chief Executive Officer, Shou Chew, stated in testimony before the U.S. House Committee on Energy and Commerce that public data “is really for interoperability purposes, to make sure that the business can still operate and American users are still getting the benefit of a global platform”.
Chew explains that public data “is what users want to share globally, so if you post a video and you want someone in France to see it, just by definition it has to leave the United States, otherwise the world cannot see it”. Beyond videos, public bios and comments are also considered public data and thus will not be exclusively stored on Oracle’s cloud servers. Instead, this data will be stored in TikTok’s own data centers.
Chew adds that this public data includes “aggregated and anonymized datasets that’s useful for interoperability for advertising, for example” but clarifies that it “cannot be used to identify users”.
TikTok’s Data Center Locations
TikTok currently has data centers in operation and is constructing new facilities in various locations across the United States, Europe, and Asia. It is important to note that most, if not all, of TikTok’s data centers are wholesale colocation facilities operated by third-party service providers. This means that TikTok leases physical data center space and power from service providers, including Digital Realty, Aligned Data Centers, Compass Datacenters, Echelon Data Centres, Green Mountain, and more.
For example, Digital Realty (NYSE: DLR), a global data center real estate investment trust (REIT), counts TikTok (including ByteDance) as its third-largest customer. TikTok occupies 19 locations and pays $132.8 million in annualized contractual base rent to lease these facilities from Digital Realty.
Additionally, in the United States, TikTok has chosen Oracle Corporation as its “trusted technology provider” and uses the company’s cloud services, known as Oracle Cloud Infrastructure (OCI), to manage its IT requirements. In this setup, instead of renting physical space from a third-party data center provider like Digital Realty, TikTok secures virtual resources such as compute, storage, and networking from Oracle Cloud. We further discuss TikTok’s use of Oracle Cloud below.
TikTok’s United States Data Centers and Cloud
In the United States, TikTok’s primary data center locations are in Northern Virginia and Hillsboro, Oregon. It is one of the largest users of wholesale data center space in the country. These data centers support the more than 150 million people in the United States who use TikTok on a monthly basis.
Interestingly, while users in the United States represent only 10% of TikTok’s global community, their voice accounts for 25% of the total views around the world.
Northern Virginia – TikTok Data Centers
TikTok states that its Virginia data centers include “physical and logical safety controls such as gated entry points, firewalls, and intrusion detection technologies”.
Since 2020, TikTok, often through its parent company ByteDance, has leased hundreds of megawatts of power capacity in Loudoun County, Virginia, including in the major Northern Virginia sub-markets of Ashburn, Sterling, and Leesburg. TikTok has leased space in wholesale colocation facilities from third-party service providers, including Digital Realty, Aligned Data Centers, Compass Datacenters, and Vantage Data Centers.
Northern Virginia, which is situated on the East Coast of the United States near Washington, D.C., is an important location for data centers due to its proximity to major internet exchange points, access to reliable power sources, dense and diverse fiber-optic connectivity, and the region boasts a low probability of natural disasters.
Hillsboro, Oregon – TikTok Data Centers
On the West Coast of the United States, TikTok boasts a significant and growing presence in the market of Hillsboro, Oregon, a suburb of Portland. Recently, TikTok has leased over 50 megawatts of power capacity in Hillsboro from third-party service providers, including Digital Realty. Concurrently, TikTok is actively hiring for multiple data center-related positions in Hillsboro.
Known as the Silicon Forest, Hillsboro, Oregon is an important location for data centers given its abundant and affordable power (primarily hydroelectric), access to trans-Pacific subsea cable landings (for low-latency connectivity to Asia-Pacific), lower seismic threat relative to other West Coast markets, and favorable tax incentives.
Project Texas – TikTok’s U.S. Security Initiative with Oracle Cloud
Project Texas is TikTok’s initiative dedicated to safeguarding both U.S. user data and U.S. national security interests. This initiative is a collaboration between TikTok, the Biden Administration, CFIUS (Committee on Foreign Investment in the United States), and Oracle Corporation.
Project Texas seeks to address key issues of corporate governance, content recommendation and moderation, data security, and unauthorized system access, particularly by people in China. The initiative represents a package of measures designed to protect against backdoors into TikTok that could be used to manipulate the platform or access U.S. user protected data.
To-date, TikTok has spent roughly $1.5 billion on the implementation of Project Texas. The company has formed a new U.S.-based subsidiary, TikTok U.S. Data Security Inc. (USDS), that currently has nearly 1,500 full-time employees. Moreover, TikTok expects the number of personnel to grow significantly in the coming year.
A three-person USDS oversight board will report to and be approved by CFIUS. Furthermore, CFIUS will specify hiring requirements and interact with Oracle as it performs its data role. Operationally, USDS includes the functions that oversee protected U.S. user data and the underlying TikTok U.S. platform.
TikTok’s commitment under Project Texas is for the data of all Americans to be stored in the United States and hosted by an American headquartered company. As such, TikTok has contracted with Oracle Corporation, which is headquartered in Austin, Texas, to store TikTok’s U.S. user data – hence the name Project Texas.
Oracle’s Role in Project Texas
Currently, 100% of U.S. user traffic is being routed to Oracle and USDS-controlled infrastructure within the United States. This infrastructure consists of servers, storage, and networking equipment, and access to U.S. user data is being restricted to U.S. based employees.
USDS is running TikTok’s video recommendation system for U.S. users, which determines what appears in TikTok’s For You feed, in the Oracle Cloud Infrastructure (OCI). To this end, Shou Chew, TikTok’s CEO, stated in testimony before the U.S. House Committee on Energy and Commerce that “today, the algorithm that powers the U.S. user experience is running in the Oracle Cloud Infrastructure”.
Additionally, Oracle engineers have already begun inspecting and reviewing TikTok’s source code and will have access to the related algorithms and data models. Furthermore, TikTok has invited other independent U.S.-government approved third-party monitors to conduct regular audits of TikTok’s data system and the software that powers TikTok.
As part of the U.S. House Committee on Energy and Commerce hearing, U.S. Congressman Jay Obernolte of California, speaking to Shou Chew, TikTok’s CEO, stated that “As part of Project Texas, you’re going to have engineers at Oracle review the algorithms, the machine learning algorithms, that TikTok uses to ensure that they are free from foreign influence. But as you and I were discussing, reviewing the algorithms doesn’t do anything, the algorithms are simple, that’s not where the secret sauce is. The secret sauce is in the data used to train them and the outcomes that you’re asking them to predict”.
Shou Chew rejected this assertion, stating “No, I actually believe that with third-party monitoring, you can identify a lot of the motivation of the code. And with enough third-party experts you can identify a lot of what the code is designed to do”.
Oracle’s Data Centers in Texas
According to reports from BuzzFeed, TikTok would hold U.S. users’ protected and private data “exclusively at a data center managed by Oracle in Texas”. While Oracle does not currently operate a cloud region or availability zones in Texas, the company has recently become much more active in leasing a significant amount of wholesale data center capacity, operated by third-party service providers in the state. Moreover, Oracle is actively seeking additional data center capacity in multiple U.S. markets in 2023.
READ MORE: Oracle Cloud’s Data Center Locations
In Texas, Dallas is the primary data center market. Notably, in 2022 alone, over 250 megawatts of power capacity was leased in Dallas from multiple third-party service providers. A sizable portion of this data center capacity may have been taken up by Oracle to support TikTok’s requirements.
BuzzFeed’s reporting also states that the Head of Global Cyber and Data Defense at TikTok has clarified that although Oracle will supply the physical data storage infrastructure for Project Texas, TikTok will maintain authority over the virtualized software layer: “It’s almost incorrect to call it Oracle Cloud, because they’re just giving us bare metal, and then we’re building our VMs [virtual machines] on top of it”.
TikTok’s Europe Data Centers
TikTok is establishing three data center campuses in Europe to bolster its user privacy and data protection capabilities, specifically in relation to the European Union’s General Data Protection Regulation (GDPR). Geographically, TikTok will have two data center campuses in Ireland and one in Norway. Once operational, these three data centers will represent a total annual investment of €1.2 billion ($1.3 billion).
With 150 million monthly active users across Europe, TikTok will utilize these data centers to store European users’ data within the region. The establishment of these European data centers will enhance the overall experience for TikTok users in the area by reducing latency and providing faster access to the application’s content and services.
Dublin, Ireland – TikTok Data Centers
TikTok’s first data center campus in Ireland is located at 3-4, Crag Avenue in Clondalkin, a suburban town situated 6 miles (10 kilometers) southwest of Dublin, Ireland. Specifically, the TikTok facility is being built by Echelon Data Centres, a hyperscale data center developer and operator, on a 35-acre site in the Clondalkin Industrial Estate.
Originally, TikTok planned to invest $500 million (€420 million) in constructing the data center; however, due to several delays, this figure has risen closer to €600 million. At full build-out, the TikTok data center campus, known by Echelon as DUB10, can support over 90 megawatts of power capacity across 653,994 square feet (60,758 square meters) of data center space. This includes three data center buildings, a dedicated substation, and an energy center, which is designed to generate electricity on a large-scale.
Notably, Echelon Data Centres is backed by an equity investment of €1 billion from Davidson Kempner and Pioneer Point Partners, as well as €855 million of debt financing from Starwood Capital Group.
TikTok is also finalizing its plans for a second data center campus in Dublin, Ireland with a third-party service provider. While no specific location details have been shared by TikTok itself, Echelon Data Centres is planning to build a second data center campus in the town of Avoca, near Arklow, in County Wicklow, Ireland. Known by Echelon as DUB20, this site can offer 100 megawatts of power capacity across 484,376 square feet (45,000 square meters) of data center space.
Hamar, Norway – TikTok Data Centers
TikTok is planning to build a data center campus outside the town of Hamar, which is located approximately 80 miles (129 kilometers) north of Oslo, Norway. Specifically, the TikTok facility is being built by Green Mountain, a colocation data center developer and operator, on a more than 365-acre site at the Heggvin Business Park in Hamar and Løten municipalities. Green Mountain will own the building, while TikTok will be the tenant.
Contract Details and Phases of Construction
TikTok has signed an initial contract with Green Mountain for three buildings and 90 megawatts of power capacity at the OSL2-Hamar data center site. The data center campus will be built in multiple phases as follows:
- Initial Phase: the first building, comprising 30 megawatts of power capacity, is scheduled for completion by November 2023 under an 11-year contract
- Subsequent Phases: the next two buildings, comprising the remaining 60 megawatts of power capacity, will be supplied in two further phases in 2024 under 10-year contracts
Once these three buildings and 90 megawatts of power capacity have been delivered by Green Mountain, the contract with TikTok is expected to generate average annual net operating income (NOI) of $79 million. Green Mountain anticipates that the total investment in building the project will amount to €750 million ($800 million), which implies a yield on cost of nearly 10%.
TikTok has also been given several options to increase the capacity of this data center campus by dozens of megawatts. Therefore, by 2025, TikTok could extend its presence up to 150 megawatts of power capacity across a total of five data center buildings, each with 30 megawatts of power capacity. If fully built-out, the project would become Norway’s largest data center campus.
Renewable Energy, Connectivity, and Ownership
TikTok’s new data center in Norway will support its data storage needs in Europe while being powered by 100% renewable energy. This renewable energy is primarily sourced from local hydropower, and the facilities will also benefit from Norway’s cooler climate by utilizing more natural cooling to lower their power usage effectiveness (PUE) and improve energy efficiency. The operations in Norway will also recycle excess heat.
In terms of connectivity, TikTok’s data center site will have access to three independent international dark fiber feeds from Eidsiva Bredbånd, GlobalConnect, and Telenor. Additionally, Hamar is close to the Swedish border with connections directly to major international operators in Sweden, as well as international connections through Oslo, Norway.
Green Mountain, a Norwegian company, is 100%-owned by Azrieli Group, an Israeli real estate and development company. Notably, Azrieli Group also owns 32.4% of Compass Datacenters, which operates mainly in North America, and from whom TikTok has leased capacity in the United States (see above).
Project Clover – TikTok’s Security Initiative in Europe
Project Clover is TikTok’s initiative dedicated to safeguarding European user data and European national security interests, similar to Project Texas in the United States. Aptly named, Project Clover is a reference to the three-leaf shamrock, which represents Ireland, where TikTok has created thousands of jobs and is establishing two data center campuses.
Notably, the European Commission, several European Union countries, and the UK have all implemented significant limits on the use of TikTok on work devices due to data security concerns. To allay these concerns, TikTok has committed to spend about €1.2 billion ($1.3 billion) a year on measures to safeguard European users, including its three European data centers.
Additionally, TikTok is working with an unnamed third-party European security company that will oversee the application’s handling of data for its more than 150 million monthly active users across Europe. The process of storing European user data locally will commence in 2023, with the migration continuing through 2024.
TikTok’s Asia Data Centers
TikTok currently operates data centers in Singapore and is constructing new facilities in Johor, Malaysia, thereby expanding its presence in Asia.
Singapore – TikTok Data Centers
TikTok has long stored U.S. and global user data in its own data centers in Singapore, with the sovereign city-state serving as a backup data storage location for its U.S. users. The company expects to delete U.S. users’ private data from its Singapore data centers and fully transition to Oracle cloud servers located in the U.S.
In Singapore, TikTok’s parent company ByteDance has a presence in Equinix’s SG3 data center located at 26A Ayer Rajah Crescent and Global Switch’s Singapore Tai Seng data center located 2 Tai Seng Avenue.
Additionally, TikTok has relocated its headquarters to Singapore (in addition to Los Angeles), to distance itself from decision-making at ByteDance’s headquarters in Beijing. TikTok has a sizable corporate presence in Singapore, leasing office space at One Raffles Quay in Singapore’s financial district. Much of TikTok’s executive team is based out of Singapore, including Shou Chew, the CEO of TikTok.
Johor, Malaysia – TikTok Data Centers
TikTok, through its parent company ByteDance, is the anchor tenant of a hyperscale data center being built by Bridge Data Centres (BDC), a subsidiary of Chindata Group (NASDAQ: CD), in Sedenak, Johor, Malaysia. This hyperscale data center project, known as MY06, spans across 38 acres of land area at Sedenak Tech Park (STeP).
In total, Chindata is constructing three buildings for ByteDance/TikTok in separate phases, which will comprise approximately 104 megawatts of power capacity, as follows:
- Phase 1: was delivered in October 2022, covering one building with 19 megawatts of power capacity, supporting ByteDance/TikTok’s Southeast Asia business
- Phase 2: 42 megawatts of power capacity, which is 100% contracted or has an indication of interest (IoI) by ByteDance/TikTok, with delivery scheduled for Q2 2023
- Phase 3: 43 megawatts of power capacity, which is 100% contracted or has an indication of interest (IoI) by ByteDance/TikTok, with delivery scheduled for Q1 2024
Notably, Chindata is highly reliant on ByteDance as a customer, with the company accounting for 86.6% of Chindata’s total revenues for the nine months ended September 30, 2022. Chindata discloses that ByteDance usually enters into 10-year service contracts with them.
TikTok (ByteDance) Ownership and Board of Directors
TikTok’s parent company, ByteDance, was founded by Chinese entrepreneurs, but has evolved its corporate structure since its founding. ByteDance is incorporated in the Cayman Islands, not China, in-part because PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of Chinese companies that engage in communications-related businesses.
ByteDance is a privately-held global company, with the following ownership structure:
- Global Institutional Investors: roughly 60%-owned by investors including BlackRock, General Atlantic, Coatue, KKR, Sequoia Capital, SIG (Susquehanna International Group) Asia Investment, SoftBank Investment Advisers, Source Code Capital, and Tiger Global
- Founders: approximately 20%-owned by the company’s founders, including Zhang Yiming
- Employees: approximately 20%-owned by its employees, including thousands of Americans
While the above metrics capture the ownership of TikTok’s parent company ByteDance, the voting power of ByteDance’s capital stock differs. In particular, ByteDance’s founder, Zhang Yiming, has “weighted voting rights” giving him control over key decision-making within the company.
Board of Directors of ByteDance
ByteDance’s board is comprised of CEO Rubo Liang, Bill Ford of General Atlantic, Arthur Dantchik of Susquehanna International Group (SIG), Philippe Laffont of Coatue, and Neil Shen of Sequoia China.