ByteDance Plans $12B AI Chip Investment by 2025

Industry insiders have revealed that ByteDance is making significant investments in AI infrastructure, with plans to spend over $12 billion by 2025. This initiative comes at a time when the Chinese company is under pressure from Washington to divest its popular video-sharing app, TikTok, in the United States.

In response to the report, ByteDance stated, "The source of information about our plans is unknown and inaccurate."

According to two sources familiar with the plans, ByteDance, headquartered in Beijing, has allocated 40 billion RMB (approximately $5.5 billion) to purchase AI chips in China, marking a twofold increase compared to last year's expenditure. The company also intends to invest around $6.8 billion overseas, aiming to enhance its foundational model training capabilities with advanced Nvidia chips.

Industry insiders further noted that approximately 60% of ByteDance's semiconductor orders in China will be sourced from local suppliers, with the remainder used to purchase downgraded Nvidia chips.

This move comes as ByteDance faces mounting pressure in its core social media operations. TikTok resumed services for its 170 million U.S. users on Sunday, following a pledge from former President Trump to hold companies distributing and hosting the platform accountable if they fail to sell the app in the U.S., citing legal concerns.

Although Trump signed an executive order on Monday allowing TikTok to continue operations for the next 75 days, he expressed a preference for a U.S. company to hold a 50% stake in TikTok in the future.

ByteDance plans to allocate the majority of its domestic AI chip usage to "inference" tasks, which are essential for processing the computations needed to generate responses from large language models.

In August 2023, ByteDance launched its AI chatbot "Doubao," which has since become the most popular AI app in China, according to analytics firm Aicpb.com. By December 2024, Doubao had reached 71 million monthly active users, in comparison to OpenAI's global weekly active user count of 300 million.