TikTok Parent ByteDance Eyes Record $20 Bn Loan for AI Expansion

ByteDance, the owner of TikTok, is in preliminary discussions with banks to raise around $20 billion through a new offshore loan, according to a Bloomberg report.

The proposed borrowing could become the Chinese technology company's largest offshore loan so far. Sources told Bloomberg that the facility may initially have a three-year term, with an option to extend it to as much as five years.

The discussions are still at an early stage and the final size, terms and structure of the loan could change, the report said. It is also not yet clear how ByteDance plans to use the proceeds.

AI Push Drives Funding Needs

The talks come as ByteDance significantly increases its focus on artificial intelligence (AI).

According to the report, the company is considering raising its capital expenditure to as much as $70 billion this year to expand data centres and build AI-related infrastructure. If business conditions remain favourable, that figure could rise to $100 billion next year.

The investment plans highlight the growing competition among global technology companies to strengthen their AI capabilities. Building large AI models and supporting infrastructure requires massive spending on computing power, servers and data centres.

ByteDance has emerged as one of China's most aggressive investors in AI as it looks to strengthen its position in the fast-growing sector.

Global Tech Firms Ramp Up AI Spending

The company's plans mirror a broader trend across the technology industry. Bloomberg reported that major US technology companies, including Amazon, Alphabet, Microsoft and Meta, are expected to spend as much as $725 billion collectively this year, with a large portion of that investment directed toward AI infrastructure.

Meanwhile, Japan's SoftBank recently secured a $40 billion bridge loan to support its investment in OpenAI. Banks are currently syndicating that debt to a wider group of investors.

The surge in AI-related spending has intensified competition among technology firms, pushing companies to secure large amounts of funding to support expansion plans.

ByteDance's Borrowing History

ByteDance last tapped international loan markets in 2024, when it raised $10.8 billion from a group of more than 20 lenders. That financing was coordinated by Citigroup, Goldman Sachs and JPMorgan. Part of the proceeds was used to refinance a $5 billion loan facility that the company had raised in 2021.

Despite long-standing expectations that ByteDance could eventually pursue an initial public offering (IPO), the company has shown little urgency to go public.

Over the past year, ByteDance has also streamlined its operations by exiting businesses such as gaming, while directing more resources toward its core social media and AI businesses.