TikTok owner ByteDance was China's biggest investor in technologies including artificial intelligence (AI) in 2024, with its outlay almost matching the combined spending of rivals Baidu, Alibaba Group Holding and Tencent Holdings, according to new research.

Beijing-based ByteDance, founded by Chinese entrepreneur Zhang Yiming, invested an estimated 80 billion yuan (US$11 billion) on capital expenditure during the year - including AI - while Baidu, Alibaba and Tencent's spent about 100 billion yuan among them, according to a research note issued by Zheshang Securities' analysts Liu Wenshu, Tong Fei and Ye Guangliang.

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ByteDance, which generates strong cash flow from Douyin, the Chinese version of TikTok, is expected to double its capital spending to 160 billion yuan in 2025, including 90 billion yuan for computing power and the rest for infrastructure such as internet data centres, according to the report, which did not break out how much was specifically spent on AI.

China's Big Tech firms are accelerating their spending on tech like AI, but remain behind their deep-pocketed US peers. ByteDance's US$11 billion in capex is still well below the US$44.5 billion spent by Microsoft alone, according to the research note.

Doubao, a conversational bot developed by ByteDance, is pictured on a smartphone in Beijing on November 12, 2024. Photo: Simon Song alt=Doubao, a conversational bot developed by ByteDance, is pictured on a smartphone in Beijing on November 12, 2024. Photo: Simon Song>

ByteDance' large expenditure seems to have delivered results. The company's AI chatbot Doubao is on par with OpenAI's GPT-4o based on indicators such as reasoning, coding, ability to follow instructions, and overall ability, according to the Zheshang Securities note.

Meanwhile, the new underlying model for Doubao, introduced this month, costs 0.003 yuan (US$0.00041) per thousand token uses, compared to 0.0175 yuan for ChatGPT, according to figures provided by ByteDance and quoted by the securities analysts. ChatGPT is not officially available in China.

Zheshang Securities also believes ByteDance's massive spending on computing power will drive progress in China's AI industry.

The report said ByteDance has also invested heavily in promoting its AI products, with advertising spending for Doubao surging to 124 million yuan in the first 10 days of June, up from nearly 18 million yuan for the two month period of April and May.

The report noted that the benefits of making Doubao free-of-charge to the public include rapid growth in users numbers, which in turn has given the model access to massive amounts of training data. The growth of ByteDance's AI capabilities will also reinforce its core businesses of short-video platform Douyin and news app Jinri Toutiao by enhancing their recommendation and search algorithms.

Since its launch in May, Doubao has surged to become the most popular AI chatbot in China, with nearly 60 million monthly active users (MAUs) by November. Globally, it is the second most popular AI product in terms of MAUs after OpenAI's ChatGPT, according to a November ranking by Aicpb.com.

ByteDance's AI portfolio now includes around 20 AI products, offering large language model-powered chatbots, text-generated videos, text-to-image generation, music generation, and video editing tools.

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