In a strategic move to secure its future in the United States, the popular short-video platform TikTok has finalized a critical agreement with tech giant Oracle and retail powerhouse Walmart. This deal establishes a new, independent US-based entity to manage the data and operations of American users, directly addressing long-standing national security concerns raised by US lawmakers.
The "Project Texas" Partnership: A New Structure for US Operations
The cornerstone of this agreement is the creation of a novel joint venture named TikTok US Data Security (USDS). This entity will be responsible for overseeing all US user data and critical content moderation systems. Oracle, a leader in cloud infrastructure, will play a pivotal role by housing TikTok's US data on its cloud servers and providing advanced technical security oversight. Walmart, already a commercial partner with TikTok through its e-commerce initiatives, will also take an equity stake in this new venture.
This complex structure, internally referred to as "Project Texas," is designed to create a firewall between the app's American operations and its Chinese parent company, ByteDance. The primary objective is to ensure that the personal information of over 150 million US users is stored domestically and managed under a governance model that satisfies the Committee on Foreign Investment in the United States (CFIUS).
CEO Shou Zi Chew's Assurance and the Stakes Involved
TikTok's CEO, Shou Zi Chew, has been at the forefront of negotiations, assuring US officials and the public of the company's commitment to data security. In communications, Chew has emphasized that this deal represents an "unprecedented" step, committing over $1.5 billion to the initiative so far. The plan involves hiring thousands of personnel within the US to run the operations of TikTok USDS independently.
The urgency of this deal cannot be overstated. TikTok has been facing an existential threat in its largest market. A divest-or-ban bill, signed into law by President Joe Biden in April 2024, gave ByteDance a nine-month deadline (extendable by 90 days) to sell TikTok's US assets or face a nationwide prohibition. This new joint venture with Oracle and Walmart is TikTok's primary strategy to comply with the law's requirements without an outright sale, arguing it mitigates security risks more effectively.
Implications for the Global Tech Landscape and Users
The successful implementation of "Project Texas" could set a global precedent for how cross-border data flows and national security concerns are managed for multinational tech companies. If approved by US regulators, it would allow TikTok to continue its operations and growth in America, preserving a major platform for creators and businesses.
However, the deal is not yet a final victory. It must still pass rigorous scrutiny from CFIUS and other government bodies. Skeptics in Congress continue to push for a full divestment, questioning whether any partnership can fully sever the potential for foreign influence. The coming months will be crucial as Oracle begins its technical audits and the new governance model is put to the test.
For now, TikTok has charted a clear path forward. By aligning with established American corporations like Oracle and Walmart, it aims to transform its operational blueprint, hoping to turn a page on years of geopolitical friction and secure its place in the competitive US social media landscape.
