ByteDance, the parent company of TikTok, has positioned itself as a key player in the generative artificial intelligence (AI) landscape within China. The Beijing-based firm has implemented a series of significant strategic moves, including attracting prominent AI talent from leading competitors such as Alibaba and various start-ups like 01.ai and Zhipu. According to individuals familiar with these developments, ByteDance's aggressive hiring spree has been central to its plans to enhance its capabilities in large language models and other AI-driven products.
With a substantial investment portfolio, ByteDance is funneling billions into AI infrastructure. Reports indicate that the company has acquired a considerable quantity of high-performance Nvidia graphics processing units (GPUs), enabling it to develop state-of-the-art AI models over the past two years. The effort is spearheaded by Zhang Yiming, the company’s founder and a notable figure in the tech industry, whose ambition arises amid a critical juncture for ByteDance. The company’s valuation sat at about $300 billion during a recent share buyback programme, yet its growth for Douyin, the Chinese counterpart to TikTok, seems to have reached saturation in its home market.
Additionally, TikTok itself has encountered challenges, with indications of slowed growth in significant markets. Recently, a US court upheld legislation obligating ByteDance to divest its TikTok operations by January or face a potential ban, compounding the company's challenges.
An insider from ByteDance remarked that Yiming recognised the transformative potential of large language models for the industry, prompting the company to fully commit to this area of AI. Despite being restricted to acquiring Nvidia's H20s — a lesser version of its GPUs intended for Chinese data centres, ByteDance has been making strides. The company procures top-tier H100s and Blackwell chips from operations outside China, leading to an expansion of its computing capabilities in regions such as Malaysia, where it has become a significant tenant for new data centres.
ByteDance's collaboration with Nvidia has been pivotal; it has reportedly become the largest customer for Nvidia in China and the leading purchaser across Asia. Tan Dai, head of Volcano Engine, ByteDance's cloud computing division, reportedly met with Nvidia's CEO Jensen Huang earlier this year, signalling the strategic importance of this partnership to Nvidia’s sales.
The release of OpenAI's chatbot has stimulated intense competition among Chinese technology firms, including Baidu and Tencent, pushing the envelope in what had previously been a unique market for generative AI. While no clear leader has emerged in the race to build the most advanced language model, ByteDance has gained considerable traction with its AI chatbot, Doubao. Launched in August 2023, Doubao has rapidly ascended to become the most-used AI application in China, possessing an impressive 60 million monthly active users by November, in stark contrast to Baidu’s Wenxiaoyan, which has approximately 13 million users.
Engineers, such as Wang Tiezhen from the machine learning platform Hugging Face, cite Doubao’s integration of various AI capabilities—such as search, translation, and multimedia generation—as a distinguishing feature contributing to its popularity. Moreover, ByteDance has unveiled an overseas version of its chatbot called Cici AI, which utilises models from third parties, including OpenAI.
Despite Zhang stepping back from his role as CEO in 2021, he has remained deeply involved in guiding ByteDance's AI strategy. Insiders claim he has actively overseen the recruitment of engineers and researchers in the AI field, frequently expressing a focus on achieving “artificial general intelligence” (AGI)—a sophisticated system surpassing human cognitive functions.
Concerns persist regarding the feasibility of Zhang’s ambitious goals, particularly in the wake of previous significant investments in initiatives like gaming and educational technologies that were ultimately curtailed. One rival executive remarked that this latest endeavour is not ByteDance's first foray into heavy investment in emerging technology, casting doubt on its sustainability.
In addition to software development, ByteDance is exploring hardware innovation through a dedicated team focused on AI chips, having recently recruited top talent from Chinese chip manufacturers. This initiative involves the creation of an application-specific integrated circuit (ASIC) designed for machine learning, emulating Google’s Tensor Processing Unit, aimed at reducing reliance on Nvidia technology.
Having established an AI lab in 2017 that attracted leaders from Microsoft Research Asia, ByteDance has since pivoted its strategies to comply with both Chinese and US regulations, developing tailored models for domestic and international markets. Reports indicate that the model development team, led by Zhu Wenjia—a prominent figure behind ByteDance’s earlier successes—works collaboratively across geographic locations, facilitating remote monitoring and control over model training processes outside China.
As the landscape of AI technology continues to evolve, ByteDance remains actively engaged in seeking new avenues for growth following the plateauing of its flagship platforms Douyin and TikTok. Insights from individuals close to the company suggest that Yiming’s vision extends beyond immediate product performance; it encompasses a broader strategy for ensuring the company’s viability in a dynamically transforming market over the coming years.
Source: Noah Wire Services