ByteDance plans on investing $12 billion in AI chips this year

The Financial Timesreports that ByteDance plans to invest more than $12 billion in artificial-intelligence infrastructure by 2025. Sources familiar revealed that ByteDance had allocated RMB 40 billion ($5.5billion) to purchase AI chip in China by 2025. This is a double of its previous spending. The company also plans to invest around $6.8 billion abroad, using NVIDIA chip technology to enhance its foundational training capabilities. ByteDance, however, has denied these allegations.

What’s important: ByteDance is investing heavily in AI to drive its future growth. In order to find new opportunities, TikTok is investing in AI development in an effort to overcome restrictions in some countries.

Details ByteDance has expanded its AI development efforts in China and internationally to boost its abilities in a highly-competitive market. According to an article in the Financial TimesZhang Yiming, ByteDance founder, is leading its full-scale commitment to AI generative.

ByteDance AI chatbot Doubao is leading the way in China. Doubao ranked second in AI web traffic for the country in December 2024 with 31.31 millions monthly visits.

ByteDance also invested in AI and facilities for data centers in the Southeast Asian Market: BytePlus is a ByteDance-owned subsidiary that plans to build a data centre in Thailand before 2025. ByteDance has announced plans to invest MYR10 billion (US$2.1 billion) in June 2024 to establish an AI Hub in Malaysia.

ByteDance competes with other major Chinese tech giants, such as Baidu Alibaba and Tencent. All of these companies are heavily investing in foundational model training and generative AI.

The context: ByteDance is making ambitious AI investments at a time that its core software business is facing increasing challenges. TikTok is the company’s popular video-sharing application, which is being scrutinized by regulators in several countries. US-China trade tensions in the semiconductor industry, especially, are a major obstacle to ByteDance AI development. Export controls imposed on Chinese companies by the US restrict their access to advanced chips such as NVIDIA’s high performance GPUs which are essential for training big AI models. The AI sector is highly competitive. Major players such as Baidu, Alibaba and Tencent are racing to develop advanced AI technologies and foundational AI models. These companies are competing not only on innovation, but also on scale and infrastructure. This makes the AI race a strategic as well as resource-intensive endeavor. Shuang is a Shanghai based tech reporter for Technode.com. She covers AI, tech companies, ecommerce and retail. Find her via e-mail: shuang.jing@technode.com. More by Shuang JING (19659015)