China's big tech ByteDance Ltd. is pursuing a massive $29.6 billion syndicated loan to expand investment in artificial intelligence (AI) infrastructure. The company initially planned to raise $20 billion, but it reportedly increased the size by nearly $10 billion as banks rushed to participate. The AI investment race among global big tech is turning into a battle to raise large pools of capital.
On the 4th, according to China Business News, the syndicated loan pursued by ByteDance Ltd. is reportedly at the stage where banks are finalizing their individual loan allocations ahead of signing formal agreements. Once completed, it is expected to be the second-largest U.S. dollar–denominated syndicated loan in Asia this year. ByteDance Ltd. previously raised a large overseas loan of about $10.8 billion in 2024.
This large fundraising is tied to ByteDance Ltd.'s aggressive expansion of AI investment. ByteDance Ltd. is developing large language models (LLMs) and rolling out Generative AI chatbots and video-generation AI models. In particular, ByteDance Ltd.'s AI chatbot "Doubao (豆包)" rapidly gained users at home, and the video-generation AI model "Seedance," unveiled early this year, quickly produces high-quality footage from short prompts, sparking what was dubbed the "Seedance shock."
In response, ByteDance Ltd. is reportedly reviewing a plan to increase this year's capital expenditure to as much as $70 billion to expand investment in AI. That would be more than double last year's level, with funds slated for data center expansion and AI infrastructure buildout.
Earlier, ByteDance Ltd. carried out a reorganization to integrate its AI businesses. It will fold the product team of the enterprise collaboration platform Feishu (飞书) into the Doubao (豆包) AI chatbot product team, integrate the Feishu sales team with the Volcano Engine (火山引擎) cloud service team, and launch a "creativity service platform." ByteDance Ltd. CEO Liang Rubo (梁汝波) said, "The pace of development in AI productivity is faster than expected," adding, "This integration aims to make better-quality products in work and productivity."
On LLMs, Liang said the gap with leading overseas models is widening, adding, "We will continue to insist on in-house development and focus on fundamentals, and even if we fall behind in the short term, we will pursue long-term optimization."
Not only ByteDance Ltd. but big tech across the board are expanding fundraising for AI investment. In China, Alibaba issued new shares worth HK$80 billion (about 14 trillion won) in August to raise funds, and it plans to invest the entire proceeds in strengthening AI capabilities and building AI infrastructure.
The four corporations Alphabet, Amazon, Microsoft, and Meta are expected to spend a combined $725 billion in capital expenditures this year, up 77% from $410 billion last year, and in the first quarter alone their capital spending on AI infrastructure reached about $130 billion. Before ByteDance Ltd., SoftBank Group, which in March raised Asia's largest syndicated loan of the year, also deployed funds into AI, including an investment in OpenAI.