‘Project Texas’ Might Fail to Solve Tiktok’s Data Security Tantrums

TikTok launches 'Project Texas' to address the US government's concerns about data security

Short-video app TikTok is working on an initiative called "Project Texas" to address the US government's concerns about data security, its CEO said on Wednesday. Shou Zi Chew, CEO of TikTok, said the "Project Texas" is designed to isolate the sensitive data of its US users so only staff in the US can access it. The move is part of the company's broader push to beef up data management and to ease US officials' concerns about data security. But many believe that 'Project Texas' might fail to solve TikTok's data security tantrums.

"This is unprecedented territory for any company," Chew said at the Bloomberg New Economy Forum in Singapore on Wednesday. "I'm confident that through our discussions, we will come up with a solution that will reasonably address any national security concerns."

TikTok has been criticized for allowing employees in China to access US user data. This week, FBI Director Christopher Wray said the bureau is concerned that China's government could use the app to control millions of users' data or software. TikTok's recommendation algorithm, which determines which videos users will see next, could also be used to influence users.

Chew argued that a social media company would not check citizenship before deciding who gets access to certain data.

"I don't know of any consumer internet companies that organize data access by nationality," he said.

He argued that data controls should be geographic to ensure data security.

He said that only an entity of US residence would have access to a certain set of data that is protected by the US, in reference to TikTok's strategy with Oracle, which would host the app's data.

TikTok is the most popular app from ByteDance, an online repository of bite-sized clips that took the short-video format mainstream and siphoned users from US social media services like Meta Platforms Inc. and Google's YouTube.

After achieving massive success, the Chinese firm ByteDance is now the world's most richly valued startup. This has elevated co-founder Zhang Yiming to the rare ranks of billionaire entrepreneurs. However, ByteDance has had a tough two years, with first the Trump administration and then its own government seeking to curtail its growing influence. Chew, a Singaporean citizen, joined ByteDance from Chinese handset maker Xiaomi Corp. in 2021 during a series of leadership changes.

Washington was concerned with the vast amounts of data TikTok was collecting from its billion-plus users, the potential for the spread of misinformation among America's youth, and the threat of espionage. The Biden White House is now working on a security agreement with TikTok to prevent a total US ban that was suggested during the Trump era, but critics are worried that such an approach won't likely prevent data from leaking to China.

On Wednesday, Beijing accused Washington of intentionally curtailing the activities of Chinese enterprises abroad.

"The United States has a history of spreading false information about Chinese enterprises in order to justify suppressing them," Chinese Foreign Ministry spokeswoman Mao Ning told reporters at a regular press briefing.

FBI Director Christopher Wray has expressed serious concerns about the potential for TikTok to collect data on American users. In testimony before the Senate Judiciary Committee, Wray said that the bureau is looking into the issue and is "very concerned" about the possibility that TikTok could be used to collect sensitive information. "We are looking into it," Wray said. "I am personally very concerned about it. "Wray's comments come amid growing scrutiny of the popular social media app, which is owned by Chinese tech giant ByteDance.US lawmakers have raised concerns that TikTok could be used to collect data on American users and even interfere in US elections. TikTok has denied any wrongdoing and has said that it does not share user data with the Chinese government.

Chew's video platform is growing rapidly, but it is not immune to the global economic downturn that has affected other Western internet giants. According to Bloomberg News, the TikTok chief recently slashed the app's ad forecast for 2022 to $10 billion from at least $12 billion, reflecting a reduction in marketing spending worldwide.

ByteDance's parent company has postponed plans for an initial public offering (IPO) as investors move away from riskier assets. In September, ByteDance offered to buy back up to $3 billion of its own shares at a valuation of around $300 billion, giving existing investors a way to cash out. Domestically, its TikTok-style Douyin app that competes with Tencent Holdings Ltd. and Alibaba Group Holding Ltd. in areas like entertainment and e-commerce.