TikTok-owner ByteDance takes lead in race to capitalise on AI in China

ByteDance, the parent company of TikTok, is taking the lead in China’s push into generative artificial intelligence (AI), attracting top talent and emerging as Nvidia's biggest customer in the country. The Beijing-based tech giant has been actively hiring AI experts from competitors like Alibaba and start-ups such as 01.ai and Zhipu, while significantly expanding its teams dedicated to developing large language models and AI products.

Over the past two years, ByteDance has invested billions in AI infrastructure, acquiring advanced Nvidia graphics processing units (GPUs) to power its AI initiatives, according to insiders. This effort is spearheaded by founder Zhang Yiming, who remains deeply involved in the company’s AI strategy even after stepping down as CEO in 2021.

ByteDance’s move into AI comes as its growth in China slows, with Douyin, TikTok’s local counterpart, reaching market saturation. Similarly, TikTok’s growth has slowed in key international markets, and the company faces regulatory challenges, including a U.S. court ruling that could force ByteDance to sell TikTok by January or face a ban.

"Zhang Yiming recognized the transformative potential of large language models and has committed to this path," said a company insider. Central to this strategy is ByteDance's collaboration with Nvidia. While U.S. export controls restrict the GPUs available for Chinese data centers, ByteDance can procure high-end models for use abroad, leading to increased computing capacity outside China, including partnerships with new data centers in Malaysia.

ByteDance’s investment in AI has made it Nvidia’s largest customer in China and a significant player in Asia. Tan Dai, head of ByteDance's Volcano Engine cloud division, even met Nvidia CEO Jensen Huang earlier this year, highlighting the importance of this relationship.

The release of OpenAI’s chatbot in 2022 ignited a race among Chinese tech companies like Baidu, Alibaba, and Tencent to develop generative AI. While no clear frontrunner has emerged, ByteDance, alongside competitors like DeepSeek and Alibaba, has made notable progress in creating cost-effective and capable models. Its AI chatbot, Doubao, launched in August 2023, has become China’s most popular AI app, surpassing Baidu’s Ernie Bot in monthly active users.

Doubao’s success lies in its versatility, combining features like search, translation, and content generation. ByteDance has also released an international chatbot, Cici AI, powered by third-party models like OpenAI’s GPT.

Zhang’s vision extends to achieving artificial general intelligence (AGI)—AI systems with human-like cognitive abilities. To this end, ByteDance is also developing its own AI chips, modeled on Google’s Tensor Processing Units, to reduce reliance on Nvidia.

ByteDance’s AI journey began in 2017 with the establishment of an AI lab led by experts from Microsoft Research Asia. Though some early projects were shelved, the company has since adopted a dual-track strategy, developing models tailored for China and international markets. These models, including Doubao and Cici, share algorithms but are trained on distinct datasets.

Zhu Wenjia, the creator of ByteDance’s recommendation algorithm, now oversees its AI model development. His team, spread across China, Singapore, and the U.S., collaborates on both local and international projects, with the ability to remotely manage global AI training.

For Zhang Yiming, the push into AI represents a search for ByteDance’s next growth engine beyond Douyin and TikTok. "Zhang is always looking five years ahead, strategizing to secure the company’s future," said a source close to him.