TikTok owner ByteDance has emerged as one among the early frontrunners within the race to harness generative artificial intelligence in China, poaching top talent from local rivals and becoming Nvidia's biggest customer within the country.
The Beijing-based company has poached top AI engineers and researchers from Alibaba and startups similar to 01.ai and Zhipu in recent months, in line with several individuals with knowledge of the hiring spree. Additionally, the corporate has formed and expanded teams to work on its large language models and AI products.
ByteDance is pouring billions of dollars into AI infrastructure. The company has purchased enough cutting-edge Nvidia graphics processors over the past two years to construct advanced AI models, in line with several people aware of the matter.
The initiative, led by Zhang Yiming, ByteDance founder and China's richest man, is a pivotal moment. While the private company was valued at around $300 billion in a recent investor share buyback program, the expansion of Douyin, TikTok's local sister app, has reached a saturation point in China.
Meanwhile, there are also signs that TikTok's growth has slowed in key markets. In one other blow, a US court on Friday upheld a law requiring ByteDance to sell the platform by January or face a ban within the country.
“(Zhang) Yiming saw the potential of enormous language models to remodel the industry and decided to go all in,” said an organization insider.
The key to AI expansion is the close business relationship with Nvidia. ByteDance can only buy Nvidia's H20s for Chinese data centers, a specialized and fewer powerful version of its GPUs tailored to comply with US export controls.
But ByteDance should purchase top-tier H100 and Blackwell chips for data centers outside the country. This has led ByteDance to extend its computing capability outside of China, including signing on as an anchor tenant for brand spanking new data centers in Malaysia.
People aware of the matter said ByteDance was already Nvidia's largest customer in China, and one among those people added that it had turn into the corporate's largest buyer in Asia.
Tan Dai, the top of Volcano Engine, ByteDance's cloud computing division, had an audience with Nvidia CEO Jensen Huang in California earlier this yr, underscoring the corporate's importance to sales in Asia, one among the people said.
ByteDance and Nvidia declined to comment.
The release of OpenAI's chatbot sparked a race by Chinese tech giants similar to Baidu, Alibaba and Tencent towards generative AI – in a previously underdeveloped area in China.
While there isn’t a definitive frontrunner in China's efforts to develop probably the most advanced LLM, ByteDance, together with rivals DeepSeek and Alibaba, have brought more powerful models to market and dramatically reduced costs for developers.
But ByteDance has secured the lead in developing China's hottest AI app, with its AI chatbot Doubao emerging as ChatGPT's top competitor in China. It released Doubao in August 2023, five months after Baidu's Ernie Bot, but has since turn into the country's hottest AI application, in line with website analytics site Aicpb.com.
As of November, Doubao had 60 million regular monthly energetic mobile users, compared to almost 13 million for Wenxiaoyan, the rebranded mobile version of Baidu's Ernie Bot. However, OpenAI said it had 300 million weekly energetic users worldwide.
“The key differentiator of ByteDance's Doubao is that it combines multiple AI capabilities into one sophisticated application,” said Wang Tiezhen, an engineer at machine learning platform Hugging Face, citing its search, translation, image and Video generation features of the chatbot.
ByteDance has also launched an overseas chatbot, Cici AI, based on third-party models including OpenAI's GPT.
Zhang, who stepped down as chief executive in 2021, stays actively involved within the group's AI strategy, in line with several company insiders.
He personally oversaw the hiring of Chinese AI engineers and researchers from rival firms, these people said. The billionaire has spoken internally of his goal of “artificial general intelligence,” systems with human-like intelligence.
“(Zhang) Yiming could be very focused on achieving AGI,” an organization insider said, referring to “artificial general intelligence, or when computer software surpasses human cognitive abilities.” Another person near Zhang said he was reluctant against ByteDance being viewed as an AI company due to risk of being exposed to increased scrutiny from Washington.
Some industry insiders are skeptical of that goal after the corporate failed several big bets on future technological development. He previously made huge investments in gaming, virtual reality and online education, all of which ByteDance invested billions of dollars in, only to then abandon or unload their investments.
“This isn’t the primary time that (Zhang) Yiming is betting big on the following technology,” said an executive at a rival AI company in China. “We’ll see how long this bet lasts.”
ByteDance also has a team working on an AI chip after poaching top talent from rival Chinese chip firms.
The team is constructing an AI accelerator application-specific integrated circuit (ASIC) — a dedicated AI chip for machine learning, people aware of the matter say.
Its efforts are modeled on Google's Tensor Processing Unit, a homegrown ASIC that the web giant hopes will reduce its reliance on Nvidia chips for AI training and inference. Reuters and The Information have previously reported on ByteDance's AI chip efforts.
In 2017, ByteDance built an AI lab that brought in executives from Microsoft Research Asia, then the leading research institution in China. ByteDance's lab included a team working on LLMs, in line with two people aware of the matter.
“At that time there was no clear path for the technology and the project was canceled,” said one manager.
Since then, ByteDance has been pursuing model development strategies to adapt to U.S. and Chinese restrictions, in line with an individual with direct knowledge of the matter. Separate models were trained – one for the Chinese market called Doubao and one other for overseas called Cici – based on the identical algorithm but using different data sets.
Nevertheless, there are overlaps. Zhu Wenjia, the technical manager behind the advice algorithm that powered ByteDance's first breakout product, news aggregator Toutiao, was tasked with developing its AI model.
Both the foreign and Chinese members of the so-called “seed team” working on the model development report back to Zhu, while there are researchers within the US working on the models alongside colleagues in Singapore and Beijing, say the matter familiar people.
In addition, the team in Beijing can remotely monitor and control the training progress of the Cici model outside of China.
“(Zhang) Yiming recognizes that ByteDance needs a brand new growth engine after Douyin and TikTok,” said an individual near Zhang. “He’s all the time occupied with what’s coming in the following five years that may extend the longer term of the corporate.”
