Tiktok’s logo was all over the October Asia-Pacific Economic Cooperation summit in South Korea, perhaps the region’s most important diplomatic get-together. Videos touted the social media platform’s ability to elevate creators, while an exhibition booth played a constant stream of short videos. TikTok executives onstage highlighted the billions of dollars its platform generates in Asia and promised to build “a trusted digital ecosystem.” Delegates got a TikTok-branded baseball cap as part of their swag bag. TikTok creators, at a private lunch on the shores of Gyeongju’s Bomun Lake, praised the platform for bringing them to an audience of hundreds of millions.
“I found my TikTok life when I became a single parent…I had to find ways to support my son,” Ryssi Avila, a Filipino singer who went viral on TikTok, told the assembled delegates. “TikTok made everything easier…It became a lifeline.”
Yet the real action involving TikTok was taking place 50 miles to the south, in Busan, where U.S. President Donald Trump and Chinese President Xi Jinping were locked in discussions over the future of U.S.-China trade— and, potentially, the fate of TikTok’s U.S. operations.
For years, U.S. officials have warned that TikTok’s Chinese ownership gives Beijing access to U.S. user data and the power to meddle in U.S. affairs by tweaking the social media platform’s algorithms. Such worries led Congress to pass last year’s so-called divestor-ban law, which threatens to boot TikTok from U.S. app stores unless its owner, ByteDance, sells the app.
In September, U.S. officials announced that a consortium of American investors will be taking over TikTok’s U.S. arm, saving the app’s U.S. operations. Soon after Xi and Trump’s meeting, Treasury Secretary Scott Bessent said that China had endorsed the plan. (Beijing offered a more tepid response, saying it will work with Washington to “properly resolve” issues related to the app.)
The Trump administration has touted the TikTok deal as a win for Zhang Yiming and friend Liang Rubo rented an apartment in Zhongguancun, a techy neighborhood in Beijing, and launched Toutiao, a hit news aggregator. But ByteDance became the global tech behemoth it is today when it launched Douyin, a short-form video platform, in 2016, and TikTok, Douyin’s international sister app, a year later.
“ByteDance is the only Chinese company that’s successful in both consumer applications and enterprise adoptions of AI.”
TikTok now boasts over 1.5 billion monthly active users worldwide. ByteDance’s fortunes swelled with it, reaching a $400 billion valuation, making it, at one point, the world’s most valuable startup.
Now, ByteDance is thinking about its next big play: AI. It debuted its Doubao chatbot in August 2023. It arrived 10 months after ChatGPT’s launch and resembles OpenAI’s main offering in that it can answer questions, conduct searches, and generate images and video. (ByteDance offers access to its AI models to other enterprises through its Volcano Engine platform.) With 157 million monthly active users, Doubao is China’s most-used AI app. In October, a ByteDance executive said the average applications and enterprise adoption of AI,” says Tony Peng, who writes about China’s AI sector.
Vice President JD Vance has claimed that TikTok’s algorithm will be “American-operated” and that the app’s U.S. arm will be sold for a relatively paltry $14 billion. But recent media reports suggest that the algorithm will remain ByteDance-owned, and the new TikTok U.S. could pay a hefty licensing fee—potentially equal to half of TikTok’s U.S. profits—back to the Chinese firm.
ByteDance doesn’t disclose its financial results and declined to comment for this article, but media reports peg its revenue at $155 billion, with almost $40 billion of that coming from outside China. Estimates of ByteDance’s U.S. revenue hover around $15 billion. Overall, ByteDance reportedly earned $33 billion in profits last year.
ByteDance could funnel any money from the sale of TikTok U.S. into maintaining its AI edge.
At the same time, ByteDance is offering its model at dirt-cheap prices to undercut rivals. Clients of ByteDance’s basic model pay 2.6 yuan (37 cents) per million tokens. Access to DeepSeek, on the other hand, costs about 42 cents per million tokens.
And unlike its Big Tech counterparts Alibaba and Tencent, ByteDance’s private status means it can’t tap public markets for capital. The TikTok U.S. deal, if finalized, may have the ancillary benefit of unlocking ByteDance’s long hoped for, and long delayed, IPO.
ByteDance was slow to join China’s AI race, but an even later entrant— DeepSeek—lit a fire beneath all contenders in January when its model, built by a tiny research lab and trained on far fewer resources, matched ChatGPT’s capabilities.
$400 billion
157 million
30 trillion
“DeepSeek wasn’t just a wakeup call for the West, but really a wake-up call for China as well,” says Shao. China’s Big Tech had grown complacent “sitting on top of their hills—commerce, or social media, or whatever—and just kind of cruising.”
Now, companies like Alibaba, Baidu, and Moonshot AI are upping their game, releasing more powerful models that are often open-source, enabling developers to experiment with the models themselves.
Whatever ByteDance decides to do with AI, it may occur under the radar, at least at first. “ByteDance is not a company that hypes themselves up a lot in the beginning,” says Shao. “They really wait until their products are mature enough to launch.”
With AI transforming China’s tech sector, ByteDance needs money and focus. Solving the TikTok U.S. problem could net them both.
This article appeared in the December 2025/January 2026: Asia issue of Fortune with the headline “ByteDance without Tiktok.”
