Temporary Outage Highlights Major Infrastructure Changes
TikTok’s US operations have ceased using ByteDance’s content delivery network (CDN) following a 14-hour outage over the weekend. When the platform returned, network observability firm Kentik noted a significant change: all traffic was being routed exclusively through third-party CDNs. This shift appears to be a strategic move to navigate potential sanctions under new US legislation that could result in a ban on the app.
Regulatory Pressure Leads to Drastic Measures
The outage came after the US Supreme Court rejected TikTok’s appeal against a law requiring ByteDance to divest its US operations or face a permanent shutdown. Enacted by former President Joe Biden to address national security concerns related to Chinese ownership, the law prompted immediate responses from TikTok’s parent company. Current President Donald Trump, meanwhile, has expressed intentions to work with ByteDance on a resolution while delaying the law’s implementation by 75 days.
TikTok Traffic Now Routed Through Third-Party CDNs
Content delivery networks (CDNs) are critical for ensuring smooth user experiences on data-intensive platforms like TikTok. Prior to the outage, most TikTok traffic in the US relied on ByteDance’s proprietary CDN. However, since the platform’s restoration, Kentik’s analysis reveals that all US traffic is now managed by third-party vendors such as Akamai and Fastly.
Doug Madory, Kentik’s director of Internet analysis, observed: “The loss of ByteDance’s US CDN as a source of TikTok traffic may simply be another measure of precaution taken by TikTok to avoid incurring penalties from the ban.”
Data Hosting at the Core of Regulatory Concerns
Where and how user data is hosted has been a central issue in TikTok’s regulatory challenges. During Trump’s previous presidency, a deal was proposed to transfer TikTok’s US operations to Oracle and Walmart, including hosting user data on American servers. Although the deal collapsed, TikTok ultimately partnered with Oracle to host its US data, a move seen as an effort to address data sovereignty concerns.
As the current legal environment evolves, Oracle is again considered a potential buyer for TikTok’s US operations. Other interested parties include Frank McCourt’s “The People’s Bid for TikTok,” featuring Shark Tank’s Kevin O’Leary, and YouTuber MrBeast’s consortium.
ByteDance to Invest $12 Billion in AI Chips
Expanding AI Infrastructure Across Global Markets
Outside the US, ByteDance plans to invest $12 billion in AI hardware by 2025. Nearly half of this spending—$5.5 billion—is earmarked for China, while the remainder will target global markets. According to the Financial Times, ByteDance will source most chips for its Chinese data centers from domestic suppliers like Huawei and Cambricon. To comply with US export restrictions, the company will also purchase modified Nvidia chips.
New Data Center Development in China
In China, ByteDance operates both proprietary data centers and servers housed in third-party facilities. The company recently announced plans to invest $614 million in a new data center in Datong, Shanxi Province. This expansion underscores its broader strategy to strengthen AI infrastructure and reduce dependence on TikTok amid regulatory uncertainties in other regions.
Global AI Investments Beyond China
ByteDance’s $7 billion allocation for Nvidia chips outside China reflects its commitment to building competitive AI infrastructure internationally. These investments aim to mitigate risks posed by potential regulatory hurdles in markets like the US, enabling ByteDance to diversify its revenue streams and reduce reliance on its flagship platform.
FAQ Section
Why did TikTok stop using ByteDance’s CDN in the US?
TikTok shifted to third-party CDNs to comply with new US laws targeting Chinese ownership and data hosting practices, reducing the risk of penalties or sanctions.
What is the role of CDNs for TikTok?
CDNs ensure fast and reliable content delivery on data-heavy platforms like TikTok by managing traffic efficiently and minimizing latency.
Who might acquire TikTok’s US operations?
Potential buyers include Oracle, Frank McCourt’s “The People’s Bid for TikTok,” and a consortium led by YouTuber MrBeast.
How is ByteDance investing in AI infrastructure?
ByteDance plans to spend $12 billion by 2025 on AI hardware, focusing on domestic and international markets, with significant investments in data centers and Nvidia chips.
What does the future hold for TikTok in the US?
TikTok’s future hinges on finding a US-based buyer or resolving regulatory concerns related to data hosting and ownership.
