ByteDance, the entity behind TikTok, may be forced to sell its American operations, but its quiet advancements in artificial intelligence are positioned to help it persist and possibly expand.

“I found my TikTok life when I became a single parent…I had to find ways to support my son,” Ryssi Avila, a Filipino singer who went viral on TikTok, told the assembled delegates. “TikTok made everything easier…It became a lifeline.”

However, the significant developments concerning TikTok were occurring 50 miles further south, in Busan, where American President Donald Trump and Chinese President Xi Jinping were engaged in talks regarding the trajectory of U.S.-China commerce—and, possibly, the outcome for TikTok's presence in the United States. 

For an extended period, American authorities have expressed concerns that TikTok's ownership by a Chinese entity provides Beijing with the capability to access American user information and influence U.S. Matters by altering the social media service's recommendation systems. These apprehensions prompted the legislative body to enact the legislation last year, commonly referred to as the divest-or-ban statute, which poses the risk of removing TikTok from American application marketplaces unless its proprietor, ByteDance, divests the application. 

In September, U.S. Officials announced that a consortium of American investors will be taking over TikTok’s U.S. Arm, saving the app’s U.S. Operations. Soon after Xi and Trump’s meeting, Treasury Secretary Scott Bessent said that China had endorsed the plan. (Beijing offered a more tepid response, saying it will work with Washington to “properly resolve” issues related to the app.) 

The Trump administration has promoted the TikTok agreement as a success. Zhang Yiming and his associate Liang Rubo secured a residence in Zhongguancun, a technologically advanced district in Beijing, and initiated Toutiao, a popular news compilation service. However, ByteDance achieved its current status as a worldwide technology giant upon releasing Douyin, a platform for brief videos, in 2016, followed by TikTok, Douyin's overseas counterpart, the subsequent year. 

Globally, TikTok now has more than 1.5 billion individuals using it each month. ByteDance's prosperity grew alongside it, achieving a valuation of $400 billion, which at one time positioned it as the planet's most highly valued new venture. 

ByteDance is now contemplating its subsequent significant move: AI. The company unveiled its Doubao chatbot in August 2023. This release occurred 10 months following ChatGPT’s debut and mirrors OpenAI’s primary product by enabling users to receive answers, perform searches, and create images and video. (ByteDance provides other businesses with access to its AI capabilities via its Volcano Engine service.) Boasting 157 million monthly active users, Doubao stands as China’s most popular AI application. In October, a ByteDance representative stated that the average applications and enterprise adoption of AI,” remarks Tony Peng, who covers China’s AI industry.

Should all parties consent to the divestiture of TikTok in the United States, a domestic joint venture entity is expected to assume control of TikTok's American operations, potentially by a January 23rd cutoff. ByteDance is anticipated to retain a minority interest, under 20%, in the newly formed enterprise. The remaining equity is said to be distributed among ByteDance's existing American financial backers, including investment firm General Atlantic, and fresh participants like Oracle and Silver Lake Management. 

Vice President JD Vance has asserted that TikTok's algorithm will be “American-operated” and that the company's American division will be divested for a comparatively modest $14 billion. However, recent media accounts indicate that the algorithm will continue to be controlled by ByteDance, and the rebranded TikTok U.S. Might incur substantial licensing charges—possibly amounting to half of TikTok's American earnings—payable to the Chinese enterprise.

ByteDance refrains from revealing its financial performance and opted not to provide a statement for this piece, yet media accounts suggest its earnings reached $155 billion, with nearly $40 billion originating from Beyond China. Projections for ByteDance's earnings within the U.S. Are approximately $15 billion. In total, ByteDance is said to have generated $33 billion in profits during the preceding year.

ByteDance could funnel any money from the sale of TikTok U.S. Into maintaining its AI edge.

The company’s large language models aren’t necessarily the most powerful in China’s AI ecosystem— that accolade usually goes to models released by DeepSeek, Alibaba, or AI startups like Moonshot AI. “ByteDance’s strength isn’t in traditional text LLMs; it’s their image and visual stuff,” Grace Shao, an analyst of China’s AI sector, points out. The firm is integrating generative AI services into TikTok and its video editing app CapCut, allowing users to employ the technology for content. (ByteDance researchers won an Outstanding Paper award in 2024 at NeurIPS, sometimes referred to as the “Olympics of AI,” for finding a way to generate images more efficiently.) 

Lam Yik—Bloomberg/Getty Images

According to Shao, ByteDance's primary rivals aren't solely DeepSeek or Alibaba; rather, it's the prominent livestreaming entity Kuaishou, whose capabilities in creating images and videos have occasionally ranked as the finest globally. 

ByteDance requires access to robust AI chips to maintain its lead in the artificial intelligence competition. According to media accounts, ByteDance stands as the foremost buyer of Nvidia chips within China, and it has investigated the possibility of developing its own processing units. Furthermore, the company is allocating resources to data centers in areas such as Latin America and Southeast Asia. 

Collectively, these endeavors are significant. In January, Reuters shared that ByteDance had allocated more than $20 billion for capital spending in 2025. (The firm labeled the report “incorrect.”) ByteDance’s rival, Alibaba, has committed to investing over $50 billion in AI during the upcoming three years. (Capital spending in the U.S. Surpasses even that, with Alphabet anticipating expenditures as high as $93 billion in 2025 by itself.) 

At the same time, ByteDance is offering its model at dirt-cheap prices to undercut rivals. Clients of ByteDance’s basic model pay 2.6 yuan (37 cents) per million tokens. Access to DeepSeek, on the other hand, costs about 42 cents per million tokens. 

In contrast to its Big Tech rivals, Alibaba and Tencent, ByteDance's classification as a private entity prevents it from accessing public markets for funding. The potential finalization of the TikTok U.S. Transaction could offer the secondary advantage of enabling ByteDance's long-anticipated and previously postponed initial public offering.

Although ByteDance was tardy in entering China's AI competition, DeepSeek, a much later participant, ignited a fervor among all rivals in January. This occurred when its model, developed by a small research facility and educated with significantly less resources, achieved parity with ChatGPT's abilities. 

“DeepSeek wasn’t just a wakeup call for the West, but really a wake-up call for China as well,” says Shao. China’s Big Tech had grown complacent “sitting on top of their hills—commerce, or social media, or whatever—and just kind of cruising.” 

Enterprises such as Alibaba, Baidu, and Moonshot AI are intensifying their efforts, introducing more capable models that are frequently publicly available, allowing programmers to test the models firsthand. 

ByteDance's approach to artificial intelligence might initially unfold without much public notice, according to Shao. “ByteDance is not a company that hypes themselves up a lot in the beginning,” Shao stated. “They really wait until their products are mature enough to launch.”

As artificial intelligence reshapes China's technology landscape, ByteDance requires both capital and concentration. Resolving the United States issues surrounding TikTok might achieve these objectives.

This article appeared in the December 2025/January 2026: Asia issue of Coins2Day with the headline “ByteDance without Tiktok.”