TikTok-parent ByteDance is reportedly gearing up to invest over $12 billion in artificial intelligence infrastructure by 2025.
What Happened: The Beijing-based tech giant has allocated approximately RMB 40 billion ($5.5 billion) for AI chip acquisitions within China, effectively doubling its expenditure from the previous year, reported the Financial Times, citing two people familiar with the plans.
ByteDance also plans to invest around $6.8 billion overseas to improve its model training capabilities using advanced Nvidia Corp. NVDA chips.
About 60% of ByteDance’s domestic semiconductor orders are expected to be fulfilled by Chinese suppliers like Huawei Technologies and Cambricon. The remaining orders will involve Nvidia chips modified to comply with U.S. export restrictions, the report noted.
See Also: Samsung, Google Team Up On AR Glasses Development, Duo To Enter Race Against Meta And Apple
Why It Matters: This substantial investment is part of ByteDance’s strategy to expand its AI infrastructure and maintain its competitive edge in the AI sector.
However, it may encounter challenges due to U.S. export controls aimed at limiting Chinese access to sensitive technologies.
ByteDance is currently the largest buyer of Nvidia chips in Asia, surpassing competitors such as Alibaba and Baidu.
The TikTok parent is restricted to purchasing less advanced chips like Nvidia’s H20, which are specifically designed with reduced capabilities to comply with U.S. export restrictions for Chinese data centers.
In 2024, ByteDance reportedly procured around 230,000 Nvidia chips, primarily H20 models, according to estimates from tech consultancy Omdia.
For comparison, Microsoft Corp. MSFT acquired approximately 485,000 of Nvidia’s more advanced "Hopper" chips during the same period, while Meta Platforms Inc. META purchased 224,000.
ByteDance is also under significant pressure in its primary social media business. TikTok resumed operations for 170 million U.S. users on Sunday. On Monday, President Donald Trump issued an executive order allowing TikTok to remain operational for 75 days.
However, he underscored his expectation for a U.S. company to acquire a 50% ownership stake in the app and hinted at the possibility of imposing tariffs on China if a deal was not reached.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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