ByteDance, the Chinese parent company of TikTok, has earmarked over 150 billion yuan ($20.64 billion) for capital expenditures in 2025, with a substantial portion of the funds being directed toward artificial intelligence, according to sources with knowledge of the matter.
This significant investment demonstrates ByteDance’s commitment to becoming a major player in the global AI landscape, even as the company grapples with uncertainty surrounding TikTok’s future in the United States.
AI infrastructure to benefit chipmakers and global expansion
The privately held technology giant plans to allocate about half of this substantial investment to build AI-related infrastructure abroad, with a focus on data centers and networking equipment, a Reuters report said, quoting sources.
This spending is expected to significantly benefit chipmakers such as Huawei Technologies and Cambricon Technologies, as well as US supplier Nvidia.
While ByteDance, Huawei, and Cambricon did not respond to requests for comment, Nvidia declined to comment on the matter.
A race to dominate the AI market
This investment aims to bolster ByteDance’s AI capabilities both domestically and internationally.
Having started 2024 as a relative laggard in the AI space, ByteDance now boasts over 15 standalone AI applications – more than its major rivals like Baidu and Tencent Holdings – including its popular chatbot, Doubao.
The influx of capital will also reinforce ByteDance’s AI offerings overseas, especially given that the company is currently navigating the complex legal situation around TikTok in the United States.
Recent executive orders signed by US President Donald Trump included a 75-day delay in the enforcement of a potential ban on the short-form video app.
Strategic focus beyond social media
The substantial investment contrasts with reports from earlier in the week, with the Financial Times reporting that ByteDance was planning a $12 billion investment in AI infrastructure, while The Information had reported a plan for up to $7 billion for Nvidia chips outside of China in December.
ByteDance is already the largest buyer of Nvidia’s H20 AI chips, which were specifically designed by the US chipmaker for China in response to export restrictions, according to Reuters.
Additionally, ByteDance is Microsoft’s biggest client in Asia for Nvidia chips accessible via cloud computing.
Developing cutting-edge AI applications
ByteDance’s AI apps in China include Doubao, a chatbot boasting 75 million monthly active users, according to QuestMobile data.
Other noteworthy products include text-to-video generator Jimeng, and image generator Xinghui, along with Kouzi, a platform for custom chatbot development, and Maoxiang, which offers role-play and emotional support.
Unlike its domestic peers, ByteDance has also developed international counterparts for its key apps: Doubao is known as Cici and Jimeng as Dreamina.
On Wednesday, ByteDance unveiled an updated version of its flagship AI model, also called Doubao, designed to challenge Microsoft-backed OpenAI’s reasoning model products.
Ambitious spending amid US tech giants
While ByteDance’s planned spending is considerable, it is still modest compared to the investment of major US tech companies.
Google’s parent company, Alphabet, allocated $50 billion for chips, data centers, and other expenses last year, while Microsoft spent $55.7 billion in its fiscal year through June 30, with a significant portion of this dedicated to AI infrastructure, underscoring the scale of the resources needed to compete in the AI space.
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