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ByteDance, the company behind TikTok, is planning to invest over $12bn in artificial intelligence infrastructure this year, focusing on cutting-edge technology for future growth amidst pressure to sell its popular video-sharing app in the US.
The Beijing-based firm has allocated Rmb40bn ($5.5bn) for purchasing AI chips in China by 2025, doubling its previous year’s budget. Additionally, they plan to invest around $6.8bn internationally to enhance their model training capabilities using advanced Nvidia chips.
About 60% of ByteDance’s domestic semiconductor orders will come from Chinese suppliers like Huawei and Cambricon, while the rest will be spent on Nvidia chips adjusted to comply with US export controls.
Chinese tech companies have been advised to source at least 30% of their chips domestically. ByteDance’s $6.8bn overseas investment is aimed at expanding their AI computing capacity for model training, facing challenges from tightened US export rules.
As ByteDance navigates challenges in its social media business, it recently restored TikTok service to its US users following President Trump’s directives. Trump signed an executive order allowing TikTok to operate for 75 days, with a condition to involve a US company in its future ownership.
These developments could impact ByteDance’s plans for a potential IPO, with the company currently valuing itself at $300bn.
ByteDance, led by founder Zhang Yiming, is intensifying its efforts to strengthen its AI infrastructure and capabilities, particularly in model training and implementation across its platforms.
Despite restrictions on Nvidia chip purchases by Chinese companies, ByteDance continues to secure chips through agreements with third-party data centers, expanding its computing capacity in various regions.
Recent regulatory changes in the US have further complicated ByteDance’s chip sourcing strategy, with stricter reviews on chip ownership and operation now in place.
Although ByteDance has already made significant orders for overseas AI chip purchases this year, future challenges remain uncertain, especially with tightening export regulations.
ByteDance has refuted reports on its budget for overseas chip purchases, emphasizing that the details are inaccurate and based on anonymous sources.
ByteDance faces stiff competition from local giants like Baidu, Alibaba, and Tencent, who are heavily investing in AI advancements. Despite challenges, ByteDance continues to focus on enhancing its AI capabilities and applications, especially in the inference tasks domain.
ByteDance’s AI chatbot, Doubao, has gained immense popularity in China, with a large user base. The company’s reliance on Nvidia chips for its operations underscores its strategic importance to ByteDance’s AI infrastructure.
The global tech industry’s significant investment in AI-related infrastructure highlights the crucial role AI plays in driving innovation and growth for companies like ByteDance.
Additional reporting by Ryan McMorrow in Beijing and Demetri Sevastopulo in Washington
