Can TikTok’s New Data Centers Buy Trust?
The ByteDance-owned company is pouring billions of dollars into infrastructure globally to address persistent data security and regulatory concerns
While TikTok reigns as the world's most popular short-video app, it continues to face many obstacles in the West due to concerns about its Chinese parentage.
The platform is frequently under scrutiny, and it is facing a potential U.S. ban over national security concerns. Most recently, Ireland's Data Protection Commission, TikTok's primary EU regulator, hit the company with a €530 million (US$594 million) fine for violating the EU’s General Data Protection Regulation (GDPR).
In response to these mounting pressures, TikTok has been making substantial investments in local data infrastructure globally, aiming to bolster data security and demonstrate regulatory compliance.
TikTok, which is owned by Chinese company ByteDance, recently committed €1 billion (US$1.14 billion) to build a data center in Finland, joining fully operational facilities in Ireland and Norway as the company races to ease regulatory jitters.
Such data centers, operated with local partners, make it easier for regulators to ensure data privacy rules are adhered to, helping protect user information and reduce the risk of breaches or external interference.
The infrastructure rollout isn’t restricted to just Europe. In Thailand, TikTok has promised to invest a massive US$8.8 billion over the next five years, focusing on digital infrastructure, workforce development, and online safety initiatives. The firm is also reportedly considering a multi-billion-dollar project in Brazil.
The multi-billion-dollar question, however, is whether TikTok’s expanding network of data centers, along with the jobs, infrastructure, and local investments they generate, can address the trust deficit that TikTok faces because of ownership concerns.
Addressing the Trust Deficit
TikTok boasts an estimated 1.12 billion monthly active users globally, according to Sensor Tower. In the U.S. alone, it reaches around 170 million users, with adults spending nearly 54 minutes on the app each day. That level of engagement generates massive amounts of data, fueling the need for a robust data infrastructure.
It has also built a flourishing creator economy, with millions relying on the platform to earn a living.
But TikTok’s biggest challenge isn’t scale, it’s trust. ByteDance has drawn intense scrutiny from Western regulators who fear that China’s national security laws could force the company to hand over sensitive data or use the platform for propaganda.
Concerns over data safety aren’t new. In 2022, ByteDance admitted that several employees had improperly accessed the TikTok data of two journalists in an attempt to identify the source of internal leaks. Those involved were later fired.
There have also been reports that the platform censors content critical of the Chinese government, such as references to the Tiananmen Square incidents, raising concerns about potential censorship and influence in other markets as well.
TikTok has repeatedly denied any impropriety, stating that it has never shared user data with the Chinese government, nor received any such requests.
Local partnerships
In an effort to address US concerns, TikTok partnered with Oracle in 2022 under “Project Texas,” which stores American user data on U.S.-based servers and puts Oracle in charge of security oversight. The system is designed to ensure that only vetted U.S.-based personnel can access sensitive American user data.
TikTok claims “Project Texas” offers a level of transparency and security that exceeds what’s provided by many U.S.-based social media companies.
Oracle has also emerged as a potential buyer in a U.S. government-backed divestment deal that would allow it to take a stake in TikTok, while ByteDance retains control of the algorithm.
Still, doubts remain. Lawmakers question whether TikTok can truly isolate U.S. data from its Chinese parent. A Fortune article from April 2024 cited former employees who said the company continued to coordinate closely with ByteDance, despite its claims of operational independence.
One former employee, Jacob Wallach, who worked at TikTok from June 2020 to August 2022, pushed back against the criticism. He argued that U.S. tech giants like Meta and Google also pose serious privacy risks, but TikTok faces greater scrutiny because of its Chinese ownership.
Despite the company’s efforts, pressure continues to mount. The U.S. Congress last year passed a law to ban TikTok unless ByteDance divested its stake in the U.S. The ban was set to take effect in January, but it has been delayed by President Donald Trump to give TikTok more time to find an American buyer.
How Asian countries are reacting to TikTok
Globally, regulators are increasingly pressuring all tech giants to comply with local laws, especially with regards to data sovereignty and content moderation. Companies failing to adapt risk sanctions or outright bans. The EU, for instance, has ordered Apple and Meta to pay a combined €700 million (US$784 million) under a new law aimed at promoting fairness in the tech sector.
India banned TikTok in 2020, along with over 50 other Chinese apps, citing national security concerns. To date, there have been no clear signs of the government reversing the ban or of TikTok negotiating a return.
Indonesia briefly banned TikTok in July 2018 over concerns that it was spreading content deemed pornographic and blasphemous. The ban was lifted after the platform agreed to clean up the content and set up a local office to work more closely with authorities.
In 2023, TikTok made headlines when the Indonesian government blocked its e-commerce unit TikTok Shop, citing a rule that requires social media and e-commerce to operate separately. Indonesia is TikTok’s second biggest international market.
TikTok’s response was swift: it acquired a 75% controlling stake in Tokopedia, Indonesia’s largest homegrown e-commerce platform, in a deal worth around US$1.8 billion, allowing it to comply with local regulations, including e-commerce and data protection laws.
There are still concerns about data security, though, especially at the government level.
Countries and territories like Japan and Taiwan have banned TikTok on government devices, especially those used to handle sensitive information, as a precaution against potential security risks and data leaks. However, there are no indications that they plan to impose a total ban on the Chinese platform.
That said, most Asian governments have been more lenient toward TikTok compared to the West. TikTok is a major platform for small businesses and creators across emerging Asian markets, so heavy restrictions may disrupt local e-commerce and the creator economy.
Governments in countries like Indonesia and Thailand also tend to welcome foreign tech investments, including from China, which remains a key trade partner for much of Southeast Asia. As a result, they are generally less inclined to impose strict restrictions unless there is significant public pressure.
Furthermore, governments in emerging Asian markets tend to focus more on content moderation and harmful content than surveillance concerns.
TikTok has expanded its local offices, leadership, and public policy teams in key markets such as Indonesia, Singapore, and Malaysia to engage directly with regulators and address country-specific requirements. The company also partners with local NGOs and fact-checkers to tackle misinformation, particularly around major events like elections.
What does the future hold?
With billions invested in local data centers like those under Project Clover in Europe and Project Texas in the US, strategic acquisitions to meet regulatory demands like the Tokopedia deal, and ongoing partnerships with local authorities, TikTok is making visible efforts to demonstrate its commitment to complying with national laws and safeguarding user data.
But its link to China through ByteDance remains an albatross around its neck, particularly in Western capitals.
Sam Sharps, executive director of policy at the Tony Blair Institute for Global Change, expressed skepticism in an interview with Wired.com, suggesting that these extensive investments might not be sufficient to overcome deep-seated political concerns. He drew a parallel with Huawei, which, despite significant investments in public relations and compliance measures, continues to face governmental mistrust regarding espionage fears.
Ultimately, infrastructure and operational changes are crucial steps, but they may not be enough. As long as fundamental concerns about data access, governance, and potential influence linked to its Chinese parentage persist, TikTok will likely struggle to fully escape the political crosshairs.
Trust, more than servers, will determine its long-term future in many key markets.