"Texas Plan" lands: TikTok reaches agreement with the United States to establish a joint data security oversight committee

TikTok's US user data will continue to be hosted by Oracle, stored in a server cluster in Texas, and subject to independent third-party audits. This arrangement continues Project Texas, launched in 2022, which further strengthens data security through physical isolation and strict access control.

China and the United States have agreed to establish a "Joint Data Security Oversight Committee," composed of technical experts and legal representatives from both countries, to review data flow logs quarterly. The committee will have the authority to request ByteDance provide algorithm call logs to ensure that user data is not transferred within China.

Regarding the equity structure, ByteDance will reduce its stake in TikTok's US operations to 19.9%, with the remaining 80.1% held by US entities. Specifically:

1. A consortium consisting of Oracle and Walmart holds 40%;

2. US private equity funds (such as Blackstone Group and Silver Lake Capital) hold 30%;

3. Existing international investors (such as General Atlantic) retain 10.1%.

This arrangement not only complies with the "20% or less Chinese ownership" requirement under the US Protecting Americans from Foreign Adversaries Act (PAFACA) but also avoids the potential technological fragmentation that could result from a complete divestiture.

TikTok US will establish an independent board of directors, with at least five of its seven members required to be US citizens, including a US government-approved "National Security Director." This director will have the power to veto major decisions, including algorithm updates and cross-border transfers of user data.

Regarding algorithm oversight, Oracle and third-party organizations (such as the Stanford University Cybersecurity Lab) will have real-time access to the source code and update history of TikTok's recommendation algorithm. ByteDance will be required to submit quarterly algorithm impact reports to the US, assessing the potential impact of its recommendation system on user behavior and content dissemination.

In addition, ByteDance will grant TikTok US a 10-year license to use its algorithm. China will conduct a compliance review of this authorization in accordance with the Regulations on the Administration of Technology Import and Export to ensure the legal and safe use of core technologies.