Business

China’s ByteDance could be forced to sell TikTok U.S., but its quiet lead in AI will help it survive

Published

3 days ago

December 2, 2025

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.”
Tony Peng, China AI analyst

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.

If all sides approve the TikTok U.S. sale, a U.S.-based joint venture will take over TikTok’s U.S. operations, likely before a Jan. 23 deadline. ByteDance will maintain a less than 20% stake in the new company; the remaining share reportedly will be split among ByteDance’s current U.S. investors—like venture firm General Atlantic—and new entrants, such as Oracle and Silver Lake Management.

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.

The company’s large language models aren’t necessarily the most powerful in China’s AI ecosystem— that accolade usually goes to models released by DeepSeek, Alibaba, or AI startups like Moonshot AI. “ByteDance’s strength isn’t in traditional text LLMs; it’s their image and visual stuff,” Grace Shao, an analyst of China’s AI sector, points out. The firm is integrating generative AI services into TikTok and its video editing app CapCut, allowing users to employ the technology for content. (ByteDance researchers won an Outstanding Paper award in 2024 at NeurIPS, sometimes referred to as the “Olympics of AI,” for finding a way to generate images more efficiently.)

ByteDance’s artificial intelligence app Doubao has quietly pulled ahead in China’s consumer AI race.

Lam Yik—Bloomberg/Getty Images

That means ByteDance’s direct competition isn’t just DeepSeek or Alibaba, Shao says; it’s livestreaming giant Kuaishou, whose Kling imageand video-generating services have at times been the world’s best.

To keep its advantage in the AI race, ByteDance needs access to powerful AI chips. Media reports claim ByteDance is the largest purchaser of Nvidia chips inside China and that it has explored designing its own processors. It’s also investing in data centers in regions like Latin America and Southeast Asia.

All those initiatives add up. In January, Reuters reported that ByteDance had earmarked over $20 billion in capital expenditures for 2025. (The company called the report “incorrect.”) ByteDance’s competitor, Alibaba, has pledged to spend over $50 billion toward AI over the next three years. (U.S. capital expenditures dwarf even that, with Alphabet expecting to spend as much as $93 billion in 2025 alone.)

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
ByteDance’s estimated valuation was once the highest among startups.

157 million
Doubao’s monthly active users make it China’s top AI app.

30 trillion
The average daily number of tokens—or units of data—Doubao processed more than doubled in September 2025.
Source: Media Reports

“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.”

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Business

Netflix lines up $59 billion of debt for Warner Bros. deal

Published

2 minutes ago

December 5, 2025

Jace Porter

Netflix Inc. has lined up $59 billion of financing from Wall Street banks to help support its planned acquisition of Warner Bros. Discovery Inc., which would make it one of the largest ever loans of its kind.

Wells Fargo & Co., BNP Paribas SA and HSBC Plc are providing the unsecured bridge loan, according to a statement Friday, a type of financing that is typically replaced with more permanent debt such as corporate bonds.

Under the deal announced Friday, Warner Bros. shareholders will receive $27.75 a share in cash and stock in Netflix. The total equity value of the deal is $72 billion, while the enterprise value of the deal is about $82.7 billion.

Bridge loans are a crucial step for banks in building relationships with companies to win higher-paying mandates down the road.

A loan of $59 billion would rank among the biggest of its type, Anheuser-Busch InBev SA obtained $75 billion of loans to back its acquisition of SABMiller Plc in 2015, the largest ever bridge financing, according to data compiled by Bloomberg.

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Business

Stocks: Facing a vast wave of incoming liquidity, the S&P 500 prepares to surf to a new record high

Published

34 minutes ago

December 5, 2025

Jace Porter

The S&P 500 index ticked up 0.3% yesterday, its eighth straight upward trading session. It is now less than half a percentage point away from its record high, and futures were pointing marginally up again this morning. Nasdaq 100 futures were even more optimistic, up 0.39% before the open in New York. The VIX “fear” index (which measures volatility) has sunk 12.6% this month, indicating that investors seem to have settled in for a calm, quiet, risk-on holiday season.

They have reason to be happy. Washington is preparing a wave of incoming liquidity that is likely to generate fresh demand for equities.

For instance, the CME FedWatch index shows an 87% chance that the U.S. Federal Reserve will deliver an interest rate cut next week, delivering a new round of cheaper money. Further cuts are expected in 2026.

Furthermore, Wall Street largely expects President Trump to announce that Kevin Hassett will replace Fed chairman Jerome Powell in May—and Hassett is widely regarded as a dove who will lean in favor of further rate cuts.

Elsewhere, the Fed has begun a series of “reserve management purchases,” a program in which the central bank will buy short-term T-bills—a move that will add more liquidity to markets generally.

Banks, brokers and trading platforms are also lining up to handle ‘Trump Accounts,’ into which the U.S. government will deposit $1,000 for every child. The trust fund can be invested in low-cost stock index trackers—a new source of investment demand coming online in the back half of 2026.

So it’s no surprise that nine major investment banks polled by the Financial Times expect stocks to rise in 2026; the average of their estimates is by 10%.

The Congressional Budget Office also estimates that the One Big Beautiful Bill Act will add 0.9% to U.S. GDP next year largely because it allows companies to immediately deduct capital expenditures from their taxes—spurring a huge round of corporate spending.

With all that fresh money on the horizon, it’s clear why markets have shrugged off their worries about AI and Bitcoin. The only shock will be if the S&P fails to hit a new all-time high by the end of the year.

Here’s a snapshot of the markets ahead of the opening bell in New York this morning:

S&P 500 futures were up 0.2% this morning. The last session closed up 0.3%.
STOXX Europe 600 was up 0.3% in early trading.
The U.K.’s FTSE 100 was up 0.14% in early trading.
Japan’s Nikkei 225 was up 2.33%.
China’s CSI 300 was up 0.34%.
The South Korea KOSPI was down 0.19%.
India’s NIFTY 50 is up 0.18%.
Bitcoin was flat at $93K.

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Business

Gen Z fears AI will upend careers. Can leaders change the narrative?

Published

1 hour ago

December 5, 2025

Jace Porter

Good morning. Are you communicating the purpose of AI with your younger employees? According to new data from Harvard, most fear AI is going to take their jobs.

The Institute of Politics at Harvard Kennedy School released the fall 2025 Harvard Youth Poll on Thursday, which finds a generation under profound strain. The nationwide survey of 2,040 Americans between 18 and 29 years old was conducted from Nov. 3–7. For these respondents, instability—financial, political, and interpersonal—has become a defining feature of daily life.

Young Americans see AI as more likely to take something away than to create something new. A majority (59%) see AI as a threat to their job prospects, more than immigration (31%) or outsourcing of jobs to other countries (48%).

Nearly 45% say AI will reduce opportunities, while only 14% expect gains. Another 17% foresee no change and 23% are unsure—and this holds across education levels and gender.

In addition, young people fear AI will undermine the meaning of work. About 41% say AI will make work less meaningful, compared to 14% who say it will make work more meaningful and 19% who think it will make no difference; a quarter (25%) say they are unsure.

In my conversations this year with CFOs and industry experts, many have said that the goal of using AI is to remove the mundane and manual aspects of work in order to create more meaningful, thought‑provoking opportunities. However, that message does not yet seem to be resonating with younger employees.

There is a lot of public discussion and widespread fear that AI will mostly take away jobs, but research by McKinsey Global Institute released last week offers a different perspective. According to the report, AI could, in theory, automate about 57% of U.S. work hours, but that figure measures the technical potential in tasks, not the inevitable loss of jobs, as Fortune reported.

Instead of mass replacement, McKinsey researchers argue the future of work will be defined by partnerships among people, agents, and robots—all powered by AI, but dependent on human guidance and organizational redesign. The primary reason AI will not result in half the workforce being immediately sidelined is the enduring relevance of human skills.

The Harvard poll also found young people have greater trust in AI for school and work tasks (52% overall, 63% among college students) and for learning or tutoring (48% overall, 63% among college students). But trust drops sharply for personal matters.

Young employees are considered AI natives. However, it is important to recognize that they have not experienced as many major technology shifts as more seasoned employees—like the dawn of the internet. It’s not to say that AI won’t change the workforce, but there’s still room and need for humans. It’s up to leaders to clearly communicate how AI will change roles, which tasks it will automate, and also provide ongoing training and guidance on how employees can still grow their careers in an AI-powered workplace.

Have a good weekend. See you on Monday.

SherylEstrada
sheryl.estrada@fortune.com

Leaderboard

Fortune 500 Power Moves

Amanda Brimmer was appointed CFO of leasing advisory and head of corporatedevelopment at JLL (No. 188), a global commercial real estate and investment management company. Reporting to JLL CFO Kelly Howe, Brimmer will partner with business leaders globally to drive financial growth and performance. Brimmer brings more than two decades of experience from Boston Consulting Group, where she most recently served as managing director and senior partner.

Galagher Jeff was appointed EVP and CFO of ARKO Corp. (No. 488), one of the largest convenience store operators and fuel wholesalers in the U.S., effective Dec. 1. Jeff most recently served as EVP and CFO for Murphy USA, Inc. Before that, he spent nearly 15 years in senior and executive finance roles with retailers, including Dollar Tree Stores, Inc., Advance Auto Parts, Inc. and Walmart Stores, Inc., in addition to a decade-long career in finance and strategy consulting at organizations including KPMG and Ernst & Young.

Every Friday morning, the weekly Fortune 500 Power Moves column tracks Fortune 500 company C-suite shifts—see the most recent edition.

More notable moves this week:

Barbara Larson, CFO of SentinelOne, a cybersecurity company, will transition from her role to pursue an opportunity outside of the cybersecurity industry. Larson will continue to serve in her role through mid-January 2026. Upon her departure, Barry Padgett, chief growth officer, will serve as interim CFO. Barry has more than 25 years of experience in operational leadership at enterprise software companies, including SAP and Stripe. SentinelOne has initiated a search for its next CFO.

Jessica Ross was appointed CFO of GitLab Inc. (Nasdaq: GTLB), a DevSecOps platform, effective Jan. 15. Ross joins the company from Frontdoor, where she served as CFO. She has more than 25 years of experience in finance, accounting, and operational leadership at companies like Salesforce and Stitch Fix, and spent 12 years in public accounting at Arthur Andersen and Deloitte.

Michele Allen was appointed CFO of Jersey Mike’s Subs, a franchisor of fast-casual sandwich shops, effective Dec. 1. Allen succeeds Walter Tombs, who is retiring from Jersey Mike’s in January after 26 years with the company. Allen brings more than 25 years of financial leadership experience. Most recently, she served as CFO and head of strategy at Wyndham Hotels & Resorts. Allen began her career with Deloitte as an auditor.

Nick Tressler was appointed CFO of Vistagen (Nasdaq: VTGN), a late clinical-stage biopharmaceutical company, effective Dec. 1. Tressler brings over 20 years of financial leadership experience. Most recently, he served as CFO of DYNEX Technologies, and before that, he was the CFO at American Gene Technologies, International, and Senseonics Holdings, Inc. Tressler has also held senior finance roles at several biopharmaceutical companies.

Mike Lenihan was appointed CFO of Texas Roadhouse, Inc. (NasdaqGS: TXRH), a restaurant company, effective Dec. 3. Keith Humpich, who served as interim CFO, was appointed chief accounting and financial services officer of the company. Lenihan has nearly 30 years of finance experience, including the past 22 years in the restaurant industry. Most recently, he served as the CFO at CKE Restaurants, Inc.

Big Deal

The ADP National Employment Report, released on Dec. 3, indicated that private-sector employment declined by 32,000 jobs in November. ADP found that job creation has been flat during the second half of 2025, while pay growth has continued its downward trend. In November, hiring was particularly weak in manufacturing, professional and business services, information, and construction.

“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” said Nela Richardson, chief economist at ADP, in a statement. “And while November’s slowdown was broad-based, it was led by a pullback among small businesses.”

ADP’s report is an independent measure of labor market conditions based on anonymized weekly payroll data from more than 26 million private-sector employees in the U.S. The next major U.S. Jobs Report (Employment Situation) for November is scheduled for release on Dec. 16 by the Bureau of Labor Statistics.

Going deeper

Here are four Fortune weekend reads:

Overheard

“The Fed no more ‘determines’ interest rates than a meteorologist determines the weather.”

—Alexander William Salter states in a Fortune opinion piece. Salter is a senior fellow with the Independent Institute and an economics professor in the Rawls College of Business at Texas Tech University. He writes: “The Fed doesn’t set interest rates. As powerful as America’s central bank is, it’s still just one player in a globe-spanning ocean of financial markets. Instead, the Fed sets targets for short-term interest rates. Those target rates indicate the Fed’s general monetary policy stance, but they are not the substance of monetary policy.”

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