The race for AI provides an additional reason to be tough on TikTok. ByteDance plays a central role in funding China’s AI ecosystem, providing computing power for AI, and building China’s global presence in the field. The Trump administration has taken a hard line on limiting American investment in rival countries’ technologies, but TikTok is pouring money into China’s AI ecosystem every day.
By Chris MILLER
Earlier this year, President Donald Trump declared that “strengthening America’s global dominance in the field of artificial intelligence [AI]” was a central goal of his presidency. The deal he will reach for TikTok’s future in the US market will be an early test of what “AI dominance” means in practice. That’s because ByteDance — TikTok’s parent company — is the leading AI business in China.
ByteDance’s clever use of AI recommendation algorithms powers the distribution of TikTok’s addictive short videos, as well as effective advertising. But its expertise goes beyond that. It has also done impressive work in other AI subfields, including large, high-quality language models and models for robotics.
ByteDance is as central to China’s AI ecosystem as OpenAI or Meta are to the American one. In AI circles, ByteDance has the prestige – and the capital – to lure top executives from Google. The company’s former employees have founded a host of startups, from international e-commerce to AI for biomedical research.
Although startup DeepSeek has garnered more attention this year, ByteDance remains China’s most successful AI business. The privately held company’s revenue is set to approach Meta’s in 2023, reaching $40 billion in earnings — before interest, taxes, depreciation and amortization (its preferred metric for profitability) — up from $25 billion a year earlier. While most of its revenue comes from its China operations, $16 billion came from TikTok sales to U.S. users.
ByteDance’s profits have allowed the company to invest heavily in buying AI chips. Last year, it bought about as many AI chips from Nvidia as Meta — though the variant used was the lower-quality H20 due to U.S. export bans. This year, the company plans to spend $5.5 billion on buying AI chips from Huawei and other Chinese companies, helping to fund the development of China’s domestic AI chip industry. And it’s not just buying chips — it’s also reportedly exploring other technological infrastructure, such as undersea cables.
As Beijing pushes forward with the international spread of its AI models, ByteDance’s global presence is a unique asset.
Trump, who previously supported banning TikTok but later changed his mind after crediting the app with helping him reach younger voters, now faces a decision that will affect the race for AI. He has set an April 5 deadline to find a non-Chinese buyer for TikTok or the app will be banned on national security grounds.
Of course, cutting off TikTok’s access to the US won’t sink ByteDance, as its China-based business is very profitable. But the US market is huge, and that’s why ByteDance has fought hard to stay there.
The White House has shifted the balance of the U.S. debate away from the dangers of AI, embracing instead its rapid progress. It has prioritized building data centers and simplified regulations related to securing the energy they need. The Commerce Department has tightened rules governing the transfer of chip technology to China. Meanwhile, Trump’s “America First” investment policy calls for stronger restrictions on investors who want to invest in Chinese AI technology.
The moves are part of a strategy aimed at keeping the US ahead of China in the race for AI. They have also given new support to hardliners in Washington to crack down on TikTok. Congress initially voted to force a full sale of TikTok, citing concerns that US user data could be used by China. TikTok has also been criticized for tracking the location of journalists and encouraging users to message members of Congress about legislation that ByteDance opposes.
The race for AI provides an additional reason to be tough on TikTok. ByteDance plays a central role in funding China’s AI ecosystem, providing computing capacity for AI, and building China’s global presence in the field. The Trump administration has taken a hard line on limiting American investment in rival countries’ technologies, but TikTok is pouring money into China’s AI ecosystem every day. (The Financial Times)
