In the United States, TikTok claims 170 million users. But in China, about 700 million use the domestic version, Douyin, and 300 million scroll the headlines on Toutiao, a news app. Every video that ByteDance’s users watch or post gives the company another data point about how people use the internet.
For years, ByteDance has applied that wealth of information to make its apps more appealing, improving its ability to recommend content to keep users hooked.
ByteDance is also using the data as the linchpin of a growing business in artificial intelligence. The company has invested billions of dollars in the infrastructure needed to power AI systems, building vast data centers in China and Southeast Asia and buying up advanced semiconductors. ByteDance is also on an AI hiring spree.
ByteDance is best known outside China for TikTok, an app so popular that at least 20 governments have adopted partial bans over concerns about its influence on national security and public opinion.
Concern over how ByteDance uses data has driven lawmakers in Washington to try to force a sale of TikTok’s US operations. On April 4, President Donald Trump extended a looming deadline by 75 days into mid-June.
Discover the stories of your interest
But in China all that data has helped ByteDance expand its business far beyond social media and gain an edge in the global race to build advanced AI technology.”ByteDance has all this data, all the time, from millions of users,” said Wei Sun, a principal analyst in artificial intelligence at Counterpoint Research in Beijing.
Officials in Beijing have pushed China’s tech companies to pivot from entertainment apps to what the government sees as an existential goal: self-reliance in cutting-edge technologies that also have military applications, like semiconductors, supercomputers and artificial intelligence. ByteDance has embraced that mission.
Last year, the company spent roughly $11 billion on infrastructure like data centres, networking equipment and computer chips, according to a report by Zheshang Securities, a Chinese financial firm. The Biden administration set up rules to try to keep Chinese companies from getting access to those kinds of chips, particularly ones made by Nvidia, the Silicon Valley giant. But ByteDance has found ways to get the computing power it needs to train its systems – in part by using data centers outside China and most likely, analysts say, by buying chips made by Chinese chipmakers like Huawei and Cambricon.
While these Chinese-made chips cannot do everything the Nvidia chips can do, they work well enough to help companies like ByteDance provide AI services to people and businesses in China. Chinese tech companies have been “encouraged to adopt local options” for buying chips, said Lian Jye Su, an analyst at Omdia.
