Popular social media platform TikTok is planning to invest 1 billion euros or $1.14 billion towards the development of its first data center in Finland as part of the company’s move to localize data storage for European users.
According to a Reuters article, citing the company’s spokesperson and sources close to the developments, the initiative marks TikTok’s efforts towards allaying worries over whether the Chinese government could access data of citizens using the platform.
TikTok wants to capitalize on Finland’s conducive environment
According to Quiver Quantitative (QQ), TikTok’s move in Finland is a demonstration of the Chinese-owned company’s commitment to European data privacy as well as regulatory compliance, directly addressing concerns over third-party and foreign government access to information.
TikTok, which is owned by China-based ByteDance, has been trying to address security concerns raised by the likes of the US government, which have alleged the firm would be used by the Chinese government to access users’ data.
In 2023, the company initiated a new data security protocol nicknamed “Project Clover” in which it plans to invest $12 billion euros in the next 10 years, amid intense pressure from lawmakers on both sides of the Atlantic.
According to the Reuters report, several governments, including the European Parliament and the European Commission, have barred their staff from using TikTok on their phones because of privacy concerns. The US went ahead by threatening its ban in the US over security concerns unless the company divests its US assets.
TikTok was once banned by outgoing President Joe Biden in January, but hours later, President Trump extended the deadline with a ban in the US if a buyer would not be found by April 05.
But, President Trump also intervened for the Chinese-owned business, as earlier this month, he extended the grace period for the company to find a new owner for the US operation. TikTok has said the bans are misguided and based on fundamental misconceptions.
Now, locating the data center in Finland will enable TikTok to capitalize on the country’s robust digital infrastructure, abundant clean energy, and cool climate, as well as enabling highly sustainable, cost-efficient, and scalable data operations.
TikTok plans more data centers in Europe
According to the company’s website, TikTok has indicated that European user data is stored in a dedicated European data enclave and is hosted across data centers in Norway, Ireland, and the US.
The company, which has more than 175 million users in Europe, indicated plans to reveal more data centers in the coming years, according to sources familiar with the matter. As the company expands its footprint in Europe, the success of these centers, according to QQ, will be measured by their ability to restore trust among regulators and users. TikTok’s parent company, ByteDance has also announced it is investing billions of dollars towards data center construction abroad and also has set eyes on Brazil and Thailand.
Under Project Clover, TikTok’s first data center in Norway went fully online this month after work started in 2023.
This also comes as Nordic countries have become attractive destinations for data centers of tech firms like Microsoft and Meta, as the cooler temperatures limit energy costs, together with the availability of cheap and emission-free electricity.
“Finland is definitely one of the places where we’re continuing to build out our infrastructure.”
Microsoft president Brad Smith.
“First we have a lot of access to carbon free energy, and second, it’s got good connectivity, so we are able to serve much of Europe from Finland,” added Smith.
According to the chairman of the Finnish Data Center Association, Veijo Terho, over 20 new data centers are on the cards in Finland, with a total cost of 13 billion euros in value and 1.3 gigawatts in capacity.
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