ByteDance, the parent company of TikTok, is significantly enhancing its artificial intelligence (AI) capabilities across various sectors, including chatbots, video generation, cloud infrastructure, and the development of proprietary chips. This information was reported by Financial Times (FT), citing sources, research firm IDC data, and analysts.
According to the publication, ByteDance launched its internal consumer AI chatbot project in Shanghai during the summer of 2023. The prototype was developed in just two months and later evolved into Doubao, which within two years became the leading AI application in China, boasting an audience of 324 million monthly users.
FT reports that ByteDance's founder, Zhang Yiming, is shifting the company’s focus from its well-known social media platforms, TikTok and Douyin, towards artificial intelligence. This strategy encompasses consumer products, foundational models, video generation, cloud services, and the creation of its own chips.
“Over time, ByteDance will resemble less of a social network and more of an AI platform with mass consumer distribution,” stated Forrester analyst Charlie Dai.
As per FT, ByteDance has been expanding its data center network, hiring researchers, and strengthening its cloud division, Volcano Engine, which offers AI solutions to corporate clients over the past three years.
Boost from DeepSeek
The company's development accelerated following the release of ChatGPT in late 2022. The article notes that in early 2024, Zhang decided to intensify research and model training.
Following the launch of DeepSeek R1 in January 2025, ByteDance hired former Google DeepMind Vice President and Google Fellow Yu Yonghua to lead fundamental research within the Seed team.
A former Doubao employee remarked that the launch of DeepSeek signaled to ByteDance:
“No matter how good the product looks, its intelligence is determined by the underlying model.”
According to FT, the Seed team comprises around 2,000 members, including researchers, infrastructure engineers, data labeling specialists, and translators. ByteDance has not publicly disclosed this number.
Corporate Investment
IDC estimates that ByteDance has become the second-largest provider of AI infrastructure and software in China, capturing 16% of the revenue in the cloud AI service market, which is projected to reach $1 billion by 2025.
However, Volcano Engine's share of the overall cloud market in China remains below 5%, the newspaper reported.
One of ByteDance's key products in video generation is Seedance 2.0. The company released a new version of its AI model for video generation in February 2026, positioning itself as a competitor to Alibaba and Kling in this domain. Given its access to vast amounts of video data from TikTok and Douyin, ByteDance clearly has a competitive edge.
FT sources indicate that training video models necessitates large volumes of high-quality footage, and unlike text, videos are more challenging to collect en masse from the open internet.
Computational Challenges
Access to computational power remains a significant limitation for ByteDance. FT reported that Doubao's daily token consumption has reached approximately 120 trillion tokens.
The shortage of advanced chips in China has been exacerbated by U.S. export restrictions. Sources indicate that ByteDance has been actively purchasing Nvidia chips, utilizing Cambricon solutions, and concurrently designing its own AI chip for internal inference tasks.
“This limitation ties everything else together,” said analyst Po Zhao regarding access to computational resources.
FT noted that ByteDance's strategy unfolds amidst skepticism regarding the profitability of substantial AI investments. The company's valuation in the secondary market has surged to $600 billion, an increase of about 50% over the year, yet investors and analysts view this transformation as a significant gamble.
Additionally, in February, Disney accused ByteDance of copyright infringement and demanded restrictions on the operation of Seedance 2.0.
Previously, the Chinese company introduced a system that acts as a "brain" for robots, enabling them to perform household tasks such as hanging clothes or cleaning off tables.