ByteDance, the parent company of TikTok, plans to invest $12 billion (approximately 17.2 trillion won) in its artificial intelligence (AI) business in 2025, the Financial Times (FT) reported on the 21st.
According to sources, ByteDance has allocated $5.5 billion (approximately 7.9 trillion won) this year to secure AI chips in China, which is double the amount compared to last year. Additionally, about $6.8 billion (approximately 9.7 trillion won) will be invested in training its own AI foundation models using advanced semiconductors from Nvidia.
However, concerns are rising that AI training plans may be disrupted due to U.S. government regulations on the transfer of advanced AI technology to China. About 60% of China's semiconductor purchase budget is expected to be spent on domestic companies like Huawei and Cambricon, while the remaining 40% will be used for purchasing Nvidia semiconductors affected by U.S. export regulations. Chinese authorities have issued unofficial guidelines to purchase at least 30% of chips from domestic suppliers.
Meanwhile, ByteDance's flagship platform TikTok remains in an unstable situation due to issues over its business rights in the U.S. Former President Donald Trump recently delayed the implementation of the TikTok ban for 75 days but is demanding that TikTok transfer 50% of its U.S. business rights to American corporations during the grace period. Discussions are ongoing regarding the establishment of a joint venture between ByteDance and American corporations; however, whether the Chinese government will approve remains a variable.
ByteDance aims to expand its global platform through the establishment of AI infrastructure and technology development while continuing efforts to maintain a leading position in China's AI industry. However, if the issue regarding TikTok's U.S. business rights is not resolved, there could be delays in its initial public offering (IPO) plans.