ByteDance, the Chinese tech giant and owner of TikTok, is making bold moves in artificial intelligence (AI). The company has reportedly allocated over 150 billion yuan ($20.64 billion) for capital expenditure in 2025. Around half of this budget will fund AI infrastructure overseas, including data centers and networking equipment.
Major Beneficiaries of ByteDance’s Spending
Prominent companies like Huawei Technologies, Cambricon Technologies, and U.S.-based Nvidia are expected to benefit from ByteDance’s spending. These firms will provide the technology needed to build robust AI infrastructure. ByteDance, however, denies the claims about its planned investments, stating that the reported figures are inaccurate. Huawei and Cambricon have not responded to these reports, while Nvidia has declined to comment.
Strengthening ByteDance’s AI Leadership
ByteDance aims to secure its lead in the AI market, particularly in China. The company has already outpaced competitors like Baidu and Tencent by launching more than 15 standalone AI applications. These include the chatbot Doubao, which has 75 million monthly active users, and other tools like the text-to-video generator Jimeng and image generator Xinghui.
Additionally, ByteDance offers platforms for custom chatbot creation (Kouzi) and emotional support apps (Maoxiang). To expand its reach, ByteDance has adapted these apps for international markets. For instance, Doubao is marketed as “Cici” abroad, while Jimeng is branded as “Dreamina.”
Competing with Global Tech Giants
While ByteDance’s $20 billion investment is substantial, it is modest compared to U.S. tech leaders. Alphabet, Google’s parent company, allocated $50 billion to data centers and chip development in 2024. Microsoft spent even more, investing $55.7 billion in AI infrastructure during its fiscal year ending June 30.
ByteDance is also competing on the hardware front. It has emerged as a significant buyer of Nvidia’s H20 AI chips, which were designed for the Chinese market to comply with U.S. export restrictions. The company is also one of Microsoft’s largest clients in Asia for cloud-based Nvidia chip access.
Challenges in the U.S. Market
Despite its rapid AI advancements, ByteDance faces regulatory challenges in the United States. Discussions about banning TikTok due to security concerns continue to pose risks for the company. ByteDance’s AI ambitions could also be affected if these issues escalate.
Pushing the Boundaries of AI
ByteDance recently updated its flagship AI model, Doubao, to compete with advanced reasoning models like those developed by OpenAI. This move underscores its commitment to staying at the forefront of AI innovation.
As ByteDance continues to invest heavily in AI, the world watches closely. The company’s ability to balance domestic and international priorities will shape its success in the highly competitive AI landscape.
