Massive Funding to Drive AI Development

ByteDance is actively positioning itself in the artificial intelligence (AI) sector, with R&D investments nearing the combined total of Baidu, Alibaba, and Tencent (BAT), reflecting its ambitious goals in the industry. According to data from Zheshang Securities, ByteDance is expected to have a capital expenditure of 80 billion yuan in 2024, almost equal to the total of BAT's combined expenditure (around 100 billion yuan). This significant investment not only focuses on capital expenditure but also emphasizes computing power and infrastructure, with projections showing capital expenditure will rise to 160 billion yuan by 2025, including 90 billion yuan specifically for AI computing power and 70 billion yuan for IDC infrastructure and network equipment.

Leading R&D and Increasing Market Share

In terms of R&D, ByteDance's investments significantly outpace its competitors. Similar to Microsoft's increased investment in OpenAI, ByteDance aims to lead the industry through technological innovation. According to Zheshang Securities, the investment in the Doubao large model has approached the combined total of BAT, indicating its technological strength in the AI field. The token consumption of the Doubao large model is expected to exceed 100 trillion per day by 2027, which is over 100 times the current level.

ByteDance's Doubao intelligent assistant had an advertising spend of nearly 18 million yuan from April to May 2024, soaring to 124 million yuan in early June, demonstrating its strong market promotion efforts. Through these initiatives, the Doubao large model is made available to the public for free while ensuring performance, rapidly increasing user numbers and expanding market share.

Product Alignment with GPT-4

On the product front, ByteDance's Doubao large model family has undergone a significant upgrade, fully aligning with GPT-4. According to Zheshang Securities, at the ByteDance Volcano Engine Winter FORCE Conference on December 18, 2024, it was announced that the comprehensive task handling capability of the Doubao General Model Pro has improved by 32% compared to May, with usage costs only one-eighth of the earlier version. This upgrade not only enhances the model's performance but also increases its competitiveness in the market.

Additionally, the Volcano Engine has upgraded three platform products—Volcano Ark, Button, and HiAgent—to help businesses efficiently build AI capability centers and develop AI applications. Currently, according to AI product rankings, the Doubao app's monthly active users have approached 60 million, ranking second globally, just behind OpenAI's ChatGPT, with a monthly active user growth rate of 16.92%.

Future Outlook: Leading China's AI Industry

With ByteDance's continuous investment and development in the AI field, its potential to become China's OpenAI is increasingly evident. The massive R&D investments, strong technological capabilities, and rich application scenarios position it well to lead the development of China's AI industry in the future. ByteDance’s goal is not only to achieve technological leadership but also to create greater value for users and society. Through ongoing innovation and investment, ByteDance is moving towards becoming a significant player in the global AI landscape.

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（Source: uSMART HK）