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At the start of the year, ByteDance, the Chinese company behind TikTok, has allocated over 150 billion yuan ($20.64 billion) for capital expenditure, focusing heavily on artificial intelligence, as stated by two informed sources.

The plan for the privately owned tech company involves investing about half of this budget internationally in AI-related infrastructure, particularly data centers and networking equipment. The main beneficiaries expected from this spending are chipmakers Huawei Technologies, Cambricon Technologies, and U.S. supplier Nvidia, according to the sources who wished to remain anonymous due to the confidentiality of the information.

ByteDance expressed that the reported spending details were inaccurate without providing further details. Nvidia chose not to comment, while Huawei and Cambricon did not respond immediately to inquiries on Thursday.

This investment aims to solidify ByteDance's artificial intelligence advances locally and abroad. Despite starting as a follower in 2024, the company now boasts over 15 standalone AI applications, surpassing competitors like Baidu and Tencent Holdings, which includes the popular chatbot Doubao.

The financial specifics of previous years were not disclosed as ByteDance is a private company. Recent reports indicated varying figures for AI infrastructure investment plans: $12 billion projected by the Financial Times for this year and up to $7 billion by The Information to access Nvidia chips outside China, where high-tech exports are restricted by the U.S.

ByteDance has become a significant purchaser of Nvidia's H20 AI chips, specially adapted for the Chinese market. Additionally, it's Microsoft's largest customer in Asia for utilizing Nvidia chips via cloud computing services.

Within China, ByteDance's AI applications include Doubao, Jimeng, Xinghui, Kouzi, and Maoxiang, catering to various needs such as chatbots, text-to-video, and emotional support.

ByteDance also operates international versions of its prominent apps, with Doubao marketed as Cici and Jimeng as Dreamina. The company recently unveiled an advanced AI model, Doubao, to compete with products from Microsoft-backed OpenAI.

Despite these investments, ByteDance's spending remains modest compared to U.S. tech giants like Google's parent company Alphabet and Microsoft, which have allocated substantial amounts to AI infrastructure in recent years.