ByteDance, the Beijing-based parent company of TikTok and Douyin, experienced a sharp decline in net profit in 2025 as it significantly increased investment in artificial intelligence (AI), according to multiple Chinese reports. The company’s profit reportedly fell by more than 70 percent last year, marking its first profit decrease in several years.

While exact figures were not disclosed, sources familiar with the matter indicated that ByteDance’s net income dropped from approximately US$33 billion in 2024 to about US$10 billion in 2025. This contrasts with earnings of other major tech firms, such as Meta Platforms, which recorded around US$60 billion, and Tencent Holdings, which posted profits of 260 billion yuan (about HK$298.7 billion) in the same period.

The reported profit slump coincides with ByteDance’s aggressive push into AI development. The company is reportedly set to increase its expenditure on Nvidia chips to around 100 billion yuan this year, up from 85 billion yuan in 2025. In addition to infrastructure investments, ByteDance has been actively recruiting prominent AI researchers, including Guo Daya, a lead scientist on DeepSeek's R1 model, Wu Yonghui, a former Google Fellow with 17 years of experience at the US tech giant, and Zhou Chang, an AI expert previously with Alibaba Group. These hires are part of ByteDance’s efforts to strengthen its AI capabilities and maintain a competitive edge in the sector.

Despite the profit decline, revenue trends showed positive developments, particularly in overseas markets. Reports indicate that ByteDance’s revenue outside China grew by nearly 50 percent in 2025, outpacing domestic growth of around 20 percent. For the first time, revenue from international markets contributed more than 30 percent of the company’s total income, up from 25 percent the previous year. This growth was largely driven by TikTok Shop, the company’s e-commerce platform, which saw its gross merchandise value increase by nearly 70 percent.

Li Liang, vice president of the Douyin division, emphasized that the profit figures reflected under international accounting standards included significant stock option costs for employees, which he said did not accurately represent the company’s operational performance. Excluding these costs, ByteDance’s overall profit and revenue reportedly grew, with only a slight decline in operating profit margin during the second half of 2025, attributed to slower growth in Douyin’s e-commerce sector and increased investments in emerging business areas.

ByteDance has increasingly positioned itself as a key player in the global AI race. Its Seedance 2.0 video model has been recognized as one of the most advanced in the industry, underscoring the company's push to leverage AI technology across its product offerings. The company did not immediately respond to requests for comment.