ByteDance, the parent company of TikTok, is planning to invest 87.2 billion yuan ($12 billion) in artificial intelligence (AI) infrastructure in 2025.
The company will allegedly spend $5.5 billion on AI in China and another $6.8 billion on model training using NVIDIA chips overseas, reported by the Financial Times.
Around 60 percent of AI investment will be allocated to Chinese tech companies like Huawei and Cambricon, with the rest spent with US chip giant NVIDIA.
The Chinese conglomerate’s investment strategy comes at a time when the US seeks to gain control over Chinese exports, and ByteDance faces pressure from the US Government to sell TikTok. The investment will bolster AI offerings abroad amid the uncertain future of TikTok in the US.
TikTok’s US Deadline
In April 2024, the US Congress said it would give TikTok until January 19 to separate from Beijing-based ByteDance or risk a ban from US app stores – due to fears of user data being shared with the Chinese government.
However, newly appointed President Trump issued an executive order this week to extend the time TikTok has before restrictions by 75 days, saying there would be “no liability for any company that helped keep TikTok from going dark”.
The president also said he wants the US to have 50 percent ownership over the Chinese company.
In a statement responding to the extension, TikTok said in a statement: “We thank President Trump for providing the necessary clarity and assurance to our service providers that they will face no penalties providing TikTok to over 170 million Americans and allowing over 7 million small businesses to thrive.”
TikTok has already garnered multiple bids including from Shark Tank investor Kevin O’Leary, Youtuber Mr Beast, and Perplexity, an AI search engine.
Strategic AI Investment?
In response to the FT report and alleged investment, ByteDance denied the spending, calling the anonymously sourced information “incorrect”.
ByteDance is the biggest buyer of NVIDIA’s ‘H2O AI’ chips, which were especially created for the Chinese market by the American chipmaker to get around US export restrictions to China.
The Chinese company’s AI offerings include ChatGPT-like app Doubao, text-to-video generator Jimeng, image generator Xinghui, and roleplay platform Maoxiang.