{"id":55748,"date":"2025-01-22T03:43:46","date_gmt":"2025-01-22T03:43:46","guid":{"rendered":"https:\/\/innodebt.com\/?p=55748"},"modified":"2025-01-22T03:43:47","modified_gmt":"2025-01-22T03:43:47","slug":"tiktok-owner-bytedance-plans-to-spend-12bn-on-ai-chips-in-2025","status":"publish","type":"post","link":"https:\/\/innodebt.com\/?p=55748","title":{"rendered":"TikTok-owner ByteDance plans to spend $12bn on AI chips in 2025"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=0815c8fb-e6ed-478b-abb1-c67d6f48fd3a\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>TikTok-owner ByteDance plans to spend more than $12bn on artificial intelligence infrastructure this year, betting on the cutting-edge technology for new growth while under pressure from Washington to sell its popular video-sharing app in the US.<\/p>\n<p>The Beijing-based company has budgeted Rmb40bn ($5.5bn) to acquire AI chips in China in 2025, according to two people familiar with the plans, which would double the amount it spent last year. The group also plans to invest about $6.8bn overseas to beef up its foundation model training capabilities using advanced Nvidia chips.<\/p>\n<p>About 60 per cent of ByteDance\u2019s domestic semiconductor orders would go to Chinese suppliers such as Huawei and Cambricon, while the rest would be spent on Nvidia chips that have been watered down to align with US export controls, according to the people.<\/p>\n<p>Beijing has given Chinese tech companies informal guidance to buy at least 30 per cent of their chips from the country\u2019s own suppliers, the people added.<\/p>\n<p>The $6.8bn in overseas investment was budgeted to build out ByteDance\u2019s AI computing capacity for model training. This investment could face challenges from recently expanded US export controls designed to hamper Chinese companies building sensitive technologies.<\/p>\n<figure class=\"n-content-image n-content-image--full\" data-component=\"image-set\"><picture><source media=\"(min-width: 700px)\"  width=\"2290\" height=\"1526\"><\/source><source media=\"(max-width: 490px)\"  width=\"1526\" height=\"1526\"><\/source><\/picture><figcaption class=\"n-content-picture__caption\"><span>A worker holding a semiconductor wafer on the production line of a factory in Binzhou, China<\/span><span> <!-- -->\u00a9 Chu Baorui\/VCG via Getty Images<\/span><\/figcaption><\/figure>\n<p>The push comes as ByteDance faces pressure in its core social media business. TikTok restored service to 170mn US users on Sunday after the country\u2019s incoming President Donald Trump vowed that companies that distributed and hosted the platform would not be held liable for violating a US law that banned the video app unless it was sold.<br \/><strong><br \/><\/strong>While Trump signed an executive order on Monday to keep TikTok open for 75 days, he said he wanted a US company to have 50 per cent ownership in TikTok in the future. Trump said he could \u201ccertainly\u201d put tariffs on China if it rejected a deal.<\/p>\n<p>Any such transaction could affect plans for a future ByteDance initial public offering, with the company valuing itself at $300bn during a recent share buyback programme.<\/p>\n<p>The company drew up its huge purchasing budget for graphic processing units in 2025 before the recent interventions in the US.<\/p>\n<p>ByteDance, which under the direction of the tech group\u2019s founder Zhang Yiming has become the frontrunner in China\u2019s AI race, is doubling down to build out its own AI infrastructure to train its foundation model, as well as to implement AI functions across its various platforms.<\/p>\n<p>It has ramped up computing capacity in south-east Asia, particularly in Malaysia. Though Chinese companies have been banned from purchasing Nvidia chips outside of the US since 2023, they have been able to secure access to chips through rental agreements with third-party data centre providers, several industry insiders said.<\/p>\n<figure class=\"n-content-image n-content-image--full\" data-component=\"image-set\"><picture><source media=\"(min-width: 700px)\"  width=\"2178\" height=\"1452\"><\/source><source media=\"(max-width: 490px)\"  width=\"1526\" height=\"1526\"><\/source><img decoding=\"async\" src=\"https:\/\/innodebt.com\/wp-content\/uploads\/2025\/01\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/82b418b2-6e9c-4aa0-92d2-a3985a36309f.jpg\" alt=\"ByteDance founder Zhang Yiming at a conference near Jiaxing, China, in 2016\" data-image-type=\"image\" width=\"2178\" height=\"1452\" loading=\"lazy\"><\/picture><figcaption class=\"n-content-picture__caption\"><span>ByteDance founder Zhang Yiming<\/span><span> <!-- -->\u00a9 VCG via Getty Images<\/span><\/figcaption><\/figure>\n<p>This loophole was closed last week by the outgoing Biden administration, which issued new rules that the identity of both the owner and operator of the chips must undergo a review process.<\/p>\n<p>While Trump could take a different stance on export controls, the regulations \u2014 if strictly implemented \u2014 would make ByteDance\u2019s chip purchases overseas more difficult than ever.<\/p>\n<p>It has already made large orders to build up overseas AI capacity this year, such as through rental agreements, according to one of the people. It should be sufficient for most of the company\u2019s needs in 2025 but what happened after that remained uncertain, the person added.<\/p>\n<p>ByteDance\u2019s budget for purchases of AI chips overseas was previously reported by news outlet The Information. In response to the FT\u2019s reporting, ByteDance said: \u201cThe anonymously sourced information about our plan is incorrect.\u201d<\/p>\n<p>ByteDance also faces challenges from deep-pocketed local competitors, such as Baidu, Alibaba and Tencent, which are investing heavily in generative AI. Alongside these rivals, it has been pushing out more capable models and lowering costs for developers.<\/p>\n<p>Chinese companies still need to build up the capacity of AI data centres onshore to support the use of AI applications even after the models have been trained. <\/p>\n<p>ByteDance plans to use most of its Chinese AI chips \u2014 including Huawei\u2019s Ascend and Cambricon \u2014 for \u201cinference\u201d tasks, the computation undertaken by large language models to generate a response to a prompt.<\/p>\n<p>ByteDance released its AI chatbot Doubao in August 2023 and the AI app has become China\u2019s most popular AI application, according to website analytics site Aicpb.com. <\/p>\n<p>Doubao, which means \u201cbeanbag\u201d in Chinese, had 71mn regular monthly active users as of December, compared with OpenAI\u2019s 300mn weekly active users globally.<\/p>\n<p>Nvidia recorded $11.6bn in revenue from China, including Hong Kong, or about 13 per cent of its global total, during the first three quarters of 2024, according to company filings.<\/p>\n<p>ByteDance is by far the largest client for Nvidia in China. The TikTok parent can only buy less advanced chips such as Nvidia\u2019s H20 for Chinese data centres, a specialised and less-powerful version of its GPUs tailored to align with US export controls.<\/p>\n<p>In 2024, it ordered about 230,000 of Nvidia\u2019s chips, mostly H20s, according to estimates from tech consultancy Omdia. This compares with 485,000 of the more advanced \u201cHopper\u201d chips bought by Microsoft last year and the 224,000 acquired by Meta. <\/p>\n<p>Tech companies around the world have spent an estimated $229bn on servers in 2024, according to Omdia, led by Microsoft\u2019s $31bn in capital expenditure and Amazon\u2019s $26bn.<\/p>\n<p><em>Additional reporting by Ryan McMorrow in Beijing and<\/em> <em>Demetri Sevastopulo in Washington<\/em><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/0815c8fb-e6ed-478b-abb1-c67d6f48fd3a\" target=\"_blank\" rel=\"noopener\" rel=\"nofollow\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. TikTok-owner ByteDance plans to spend more than $12bn on artificial intelligence infrastructure this year, betting on the cutting-edge technology for new growth while under pressure from Washington to sell its popular video-sharing app in the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":55749,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-55748","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>TikTok-owner ByteDance plans to spend $12bn on AI chips in 2025 | Innodebt<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this 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