After soaring to global attention with TikTok, Chinese tech giant ByteDance is rapidly repositioning itself as a major player in the artificial intelligence arena. This shift isn’t merely a diversification strategy; it’s a response to mounting regulatory and political pressures surrounding its enormously popular video-sharing app.
While facing legal and privacy scrutiny for years, ByteDance has been quietly developing cutting-edge AI products. The most prominent of these is Doubao, an AI chatbot launched in 2023 that has quickly become China’s most popular, boasting over 100 million daily users – rivaling the scale of OpenAI’s and Google’s offerings. Alongside Doubao, ByteDance’s latest video generator, Seedance 2.0, is gaining international recognition for its cinematic output.
However, the path for ByteDance’s AI services overseas isn’t guaranteed to be smooth. Like TikTok, they could encounter challenges related to data privacy and intense competition within the sector. ByteDance CEO Liang Rubo stated last month that the company believes AI “would become an even more important application than web search.”
According to Charlie Dai, vice president and principal analyst at Forrester, “ByteDance’s shift reflects a deliberate evolution from social media toward an AI‑native model.” This pivot is directly fueled by the regulatory and political headwinds facing TikTok.
The European Commission recently highlighted concerns about TikTok’s “addictive features,” indicating potential fines amounting to up to 6% of ByteDance’s annual global revenue if changes aren’t made to the platform’s design. In the United States, a potential ban loomed over TikTok due to data security concerns, prompting a complex negotiation process.
That negotiation culminated in January with the establishment of a majority-American-owned joint venture to operate TikTok’s US business, allowing ByteDance to retain a stake of less than 20%. This resolution has provided relief to businesses reliant on the platform. Rocky Lee, a seller of Chinese digital gadgets and pet products, expressed relief, stating he could now reassure other traders about the platform’s stability. Lee also utilizes Doubao and other AI tools for tasks like product selection and market research, noting a potential reduction in staffing needs due to AI-driven efficiencies.
ByteDance’s commitment to AI is underscored by its substantial investment in infrastructure and talent. In 2024, the company was Nvidia’s largest Chinese client, and plans to spend billions of dollars on AI microchips and infrastructure in 2026. While domestic competitors like DeepSeek and Qwen are also making strides, Doubao already processes over 50 trillion tokens daily, though still less than Google’s 1.3 quadrillion monthly.
Industry analyst Chen Yan at QuestMobile describes ByteDance’s focus on AI as “a well-considered decision in response to the evolving circumstances,” emphasizing the need to find the “next generation of productivity” as growth on TikTok becomes more challenging. Shen Qiajin, founder of ideaFlow, an interactive content generation platform, agrees, stating ByteDance is “the most aggressive player in the market.”
ByteDance is reportedly willing to pay salaries two to three times the market average to attract top AI talent, according to industry headhunter Shen Wei. This aggressive recruitment strategy highlights the company’s determination to build a leading AI team.
ByteDance’s ambitions extend beyond replicating TikTok’s success with its AI ventures. The Doubao team is now led by Alex Zhu, the co-founder of Musical.ly, which later merged with TikTok. The app, rebranded as Dola (previously Cici) for international markets, faces similar challenges to TikTok regarding data governance and geopolitical tensions.
While TikTok successfully filled a niche in the social media landscape, Chen Yan suggests Western AI giants possess a deeper understanding of local regulatory frameworks and user demands. Competition within China is also intensifying, with Tencent and Alibaba aggressively promoting their own chatbots during the Lunar New Year.
A significant challenge for ByteDance, and Doubao specifically, remains profitability. A Doubao staffer, speaking to Chinese tech media outlet the Late Post, acknowledged that the focus is now on monetization after surpassing 100 million daily active users.
