TikTok Eyes Partial Sale and Doubling Down on AI

The high-stakes drama involving TikTok’s future in the United States and the financial strategies of its Chinese parent company, ByteDance, took a turn as investors considered possible options.

An American ban on the social media app, based on concerns about data privacy, content moderation and national security, has been delayed by an executive order. As the countdown on that delay continues, General Atlantic CEO Bill Ford, whose firm holds a stake in ByteDance, told Bloomberg Television on Thursday (Jan. 23) that a partial sale of TikTok’s U.S. operations that meets government security demands is possible. A partial sale would still allow ByteDance to maintain some control over its flagship asset.

“We are optimistic we will find a solution,” Ford said, speaking at the World Economic Forum in Davos.

The exact structure of such a deal remains unclear, but it could involve either selling a significant stake to American investors or creating a new entity to oversee TikTok’s U.S. operations. PYMNTS reported that bidders have begun showing interest in acquiring TikTok. A company that recently expressed interest in merging with TikTok is the search engine startup Perplexity AI.

It also appears ByteDance’s contingency strategy, in case a deal can’t get done in time, is to double down on AI.

Anonymous sources told Reuters that ByteDance has earmarked over 150 billion yuan ($20.64 billion) in capital expenditures — mostly related to artificial intelligence (AI) — for this year. Compare that to a recent report by the Financial Times that said ByteDance was allocating $12 billion for AI infrastructure.

The company has over 15 standalone AI applications, according to a Reuters report, including the chatbot Doubao, which has 75 million monthly users, the text-to-video generator Jimeng, and the image generator Xinghu.

Sources said about half of the $20 billion capital expenditure investment is planned for overseas AI infrastructure, including data centers and networking equipment, and that major chipmakers Huawei, Cambricon, and U.S. supplier Nvidia are expected to be the main beneficiaries of this spending.

Reuters noted that ByteDance is the biggest buyer of Nvidia’s H20 AI chips, which the chipmaker tailored for China in response to trade restrictions.

When contacted by Reuters for comment, ByteDance responded that the information provided was “incorrect.”