Bytedance Profit Plunges On Ai Push As Tiktok Shop Powers Overseas Growth: Reports

ByteDance, the parent company of TikTok and Douyin, saw its net profit plummet by more than 70 per cent in 2025 as it poured money into artificial intelligence, according to Chinese media reports.

At the same time, revenue from overseas markets surged by nearly 50 per cent, far outpacing the roughly 20 per cent growth in China, according to reports on Monday by outlets including Securities Times and 36Kr, which cited a person familiar with the matter.

For the first time, overseas revenue accounted for more than 30 per cent of the total, up from 25 per cent in 2024, the reports said. The growth was mainly driven by TikTok Shop, the e-commerce business whose gross merchandise value grew nearly 70 per cent last year.

Li Liang, vice-president of the company’s Douyin department, said on Monday that the drop was based on figures calculated under international accounting standards that took into account the cost of stock options for employees, which did not “reflect the actual operations”. Overall profit and revenue grew excluding the stock option cost, he added.

Li said the operating profit margin “slightly decreased” in the second half of 2025 due to the slowing growth of Douyin e-commerce and increased investments in emerging businesses, but the decline was not as steep.

TikTok Shop, ByteDance’s e-commerce business arm, recorded gross merchandise value growth of nearly 70 per cent last year. Photo: Reuters

ByteDance, a privately owned company that has not made its financials public, did not immediately respond to a request for comment on Monday.

The reports did not disclose the exact profit figure. Based on a net income of US$33 billion in 2024, according to The Information, last year’s profit dropped to about US$10 billion. That figure was only a fraction of Meta Platforms’ US$60 billion or Tencent Holdings’ 260 billion yuan (US$38 billion) profit in 2025.

Beijing-based ByteDance recorded its first profit decline in years after adopting an “all-in” mentality on AI. For example, it planned to spend about 100 billion yuan on Nvidia chips this year, up from roughly 85 billion yuan last year, the South China Morning Post reported in December.

The company has also stepped up efforts to lure top AI talent. Guo Daya, a lead researcher on DeepSeek’s R1 model, reportedly joined its Seed AI development team, according to a report last week by Chinese media outlet LatePost.

Other high-profile hires included , a respected “Google Fellow” who worked at the American tech giant for 17 years, and Zhou Chang, an AI scientist from Alibaba Group Holding who helped develop its Qwen large language model. Alibaba owns the SCMP.

The AI push has helped ByteDance, known for short-video apps, gain a foothold in the global race. Its Seedance 2.0 video model has been described as one of the most powerful, though it prompted major Hollywood studios – including Walt Disney Studios and Paramount Pictures – to accuse it of intellectual property theft. ByteDance said it would strengthen safeguards. It recently launched the model overseas but has not made it available in the US market.

Beyond AI, the company has weathered political headwinds. In January, it set up a new joint venture in the US to retain operations in one of its biggest markets. The entity is 19.9 per cent owned by ByteDance. Oracle, Silver Lake and MGX each hold 15 per cent, while affiliates of existing ByteDance investors control 30.1 per cent.

The moves saw ByteDance’s valuation surge to a record high of more than US$600 billion after a proposed equity sale by one of the founding shareholders, the SCMP reported earlier this month.