ByteDance, the Chinese tech company behind TikTok, has seen its net profit for 2025 crash by over 70%, according to reports by Chinese financial outlets citing people familiar with the matter. The profit decline is a result of the company’s increased spending on artificial intelligence (AI) infrastructures, computing power, and research. Despite the poor results, ByteDance has also experienced significant growth in its overseas revenue.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
Heavy AI Investment Drives ByteDance Profit Decline
ByteDance aggressively ramped up its AI spending in the third and fourth quarters of 2025. The company invested almost $20 billion towards the cause and also repeated plans to spend around 160 billion yuan, equivalent to about $22.7 billion, to further improve its AI capabilities in early 2026.
The investments focused on AI-backed server infrastructure and a large-scale cluster capable of supporting thousands of GPUs for training advanced AI models. This expense was important for the company’s growth, as its AI chatbot, Doubao, and its global version, Dola, are built on the back of AI infrastructure. Nevertheless, the surge in investment weighed on margins even as business grew.
Overseas Revenue Provides Some Relief
ByteDance experienced strong growth in its international business despite a significant drop in net profit in 2025. The company’s overseas revenue increased by nearly 50% that same year, far outpacing domestic growth, and its share of total company revenue rose from 25% in 2024 to an all-time high of over 30%.
This growth was mainly driven by the rapid expansion of its e-commerce platform, TikTok Shop, across multiple markets. The platform reached about 400 million users in 2025 and achieved approximately $100 billion in Gross Merchandise Value (GMV). This has positioned the platform as the fifth-largest e-commerce platform globally.
This increase reflects the company’s growth across diversified revenue streams, despite surging AI investments currently affecting earnings. As such, continued success in international markets could help balance the financial impact of its heavy AI spending.
Which Big IPO is Coming?
Despite talk of a potential IPO, ByteDance has not officially announced plans to go public. It remains a privately held company with no public stock yet. However, investors watching for upcoming IPOs can monitor companies such as SpaceX, Anthropic, and OpenAI. For more information on their valuations, performance, and recent updates, visit TipRanks Private Company Center.
