ByteDance Net Profit Drops 70% in 2025 as AI Spending Surges

Gate News message, April 21 — ByteDance's net profit fell by more than 70% in 2025 as the company significantly increased spending on artificial intelligence infrastructure and development.

Overseas revenue rose nearly 50% compared to approximately 20% growth in China, increasing its share of total revenue. TikTok Shop, the company's e-commerce platform, drove much of this growth with gross merchandise value expanding nearly 70% last year. The net profit figure was calculated under international accounting rules that include employee stock option costs.

ByteDance spent approximately $20 billion on capital expenditure in 2025, with most allocated to AI infrastructure. The company plans to spend 160 billion yuan (approximately $22.7 billion) in early 2026 to further expand AI capabilities. Operating margins declined in the second half as Douyin e-commerce growth slowed and investment in newer businesses increased. Additionally, TikTok Shop faces policy headwinds as governments tighten duty-free rules for low-value parcels, with the European Union ending the exemption in July 2024 and the United States announcing plans to do the same in September 2024.