Chinese tech giant ByteDance is expected to spend more than 150 billion yuan ($20.6 billion) in capital expenditures this year, mainly on artificial intelligence.
The company, which owns TikTok, will spend half of the funds on overseas artificial intelligence-related infrastructure, such as data centers and network equipment, according to two sources who spoke to Reuters.
The main beneficiaries of the spending will be chipmakers Huawei Technologies Co Ltd and Cambrian Technologies Inc, as well as U.S. supplier Nvidia Corp, people familiar with the matter said.
See also: Trump credited with closing 'minimum' trade loopholes with China
The spending will help ByteDance defend its leading position in domestic artificial intelligence. It started 2024 as a laggard but now has more than 15 independent AI applications, more than rivals like Baidu and Tencent Holdings, including top chatbot Doubao.
At a time when ByteDance is in trouble, the funds will also strengthen overseas artificial intelligence products. Coping with TikTok’s future in the United States.
U.S. President Trump signed an executive order on Monday to postpone for 75 days a ban on the short video app that requires U.S. companies to stop hosting TikTok unless ByteDance sells its U.S. operations.
“China softens attitude towards TikTok sales”
Chinese authorities seem to softening their stance on TikTok's fateThis could pave the way for Beijing-based ByteDance to begin talks with U.S. investors, the South China Morning Post reported on January 21, citing people familiar with the matter.
“With U.S. President Donald Trump's recent enthusiasm for a deal on TikTok, Beijing sees the value of a fair arrangement to improve bilateral ties,” the newspaper quoted a person said to have been “briefed on the Chinese government's considerations.” say.
However, a forced sale of TikTok could derail the company's initial public offering plans, as the company valued itself at $300 billion in a recent share buyback.
ByteDance, Huawei and Cambrian did not respond to requests for comment on Thursday (January 23). Nvidia declined to comment.
It's unclear how plans for 2025 compare to previous years, as ByteDance is a private company that doesn't disclose financial details.
U.S. takes steps to tighten use of Nvidia chips
On Tuesday, the Financial Times reported ByteDance plans to invest $12 billion in artificial intelligence infrastructure. In December last year, The Information reported that Nvidia planned to spend $7 billion to purchase Nvidia semiconductors outside China, while the United States restricted the export of high-tech chips to China.
ByteDance “has already built computing capacity in Southeast Asia, particularly Malaysia,” adding that “although Chinese companies have been banned from purchasing Nvidia chips outside the United States since 2023, they have been able to obtain chips through leasing with third parties. Data center providers reach agreement,” industry insiders said.
But it noted that the loophole was closed last week. Biden administration issues new rules, identity of chip owners and operators must be vetted. “While Trump may take a different stance on export controls, these rules – if strictly enforced – will make it more difficult than ever for ByteDance to source chips overseas.”
Bitbeat is already the biggest buyer Nvidia’s H20 AI chipAccording to a Reuters report in September, the U.S. chipmaker was tailor-made to deal with China's restrictions.
Sources told Reuters that the TikTok owner is also Microsoft's largest customer in Asia for Nvidia chips, which can be accessed through cloud computing.
Its artificial intelligence applications in China include Doubao, which has 75 million monthly active users, according to QuestMobile.
It also operates text-to-video generator Jimeng and image generator Xinghui, as well as custom chatbot development platform Kouzi and Maoxiang, which provides role-playing and emotional support.
Unlike its domestic counterparts, ByteDance has created overseas counterparts for its largest applications – internationally, Doubao is called Cici and Ji Meng is called Dreamina.
On Wednesday, ByteDance updated its Flagship AI model – also called Doubao – An inference model product designed to challenge OpenAI supported by Microsoft.
Still, its spending is modest compared with U.S. tech giants. Google parent Alphabet last year planned to spend $50 billion on chips, data centers and other spending, while Microsoft spent $55.7 billion in the fiscal year ended June 30, much of it on artificial intelligence infrastructure.
- Reuters With additional input and editing by Jim Pollard
Note: On January 23, 2025, additional text and links were added to this report to clarify details about ByteDance's use of Nvidia chips in data centers.
See also:
Biden restricts U.S. companies and allies' access to artificial intelligence chips
U.S. rules restrict investment in Chinese chips, quantum and artificial intelligence
China says U.S. investment ban is detrimental to artificial intelligence industry
ByteDance “prefers to shut down TikTok in the US” if legal fight fails
The United States says the forced sale of TikTok is for security rather than free speech
‘China won’t allow it’: TikTok compares spinoff to chip ban
Trump says he will ‘never ban TikTok’ if elected – New York Post
TikTok comes under U.S. legal crackdown for 'harmful' impact on children
U.S. polls show that nearly half of Generation Z wish TikTok had never been invented
Nvidia’s new artificial intelligence chips for China are priced close to Huawei alternatives
