Bloomberg reported that the Chinese company ByteDance, the developer of the TikTok application, is in preliminary talks with a number of banks to obtain an external loan worth approximately 20 billion US dollars, in the largest potential external borrowing process in the company’s history, in conjunction with expanding its investments in the field of artificial intelligence.

The agency quoted informed sources as saying that the company, which is based in Beijing, is considering obtaining the loan for a period of three years with the possibility of extending it to five years, noting that the discussions are still in their initial stages and that the final details may change.

The sources added that the uses of the proposed financing have not yet become clear, while the company has not issued any official comment regarding this news.

ByteDance seeks to strengthen its presence in the artificial intelligence sector, as it is considering raising its capital spending to about $70 billion during the current year to expand data centers and infrastructure related to this field, with the possibility of spending rising to $100 billion next year if economic and commercial conditions remain favorable.

Competition in the artificial intelligence sector
Bloomberg indicated that global competition in the artificial intelligence sector is escalating, as major American technology companies, including Amazon, Alphabet, Microsoft, and Meta, are planning capital spending that may reach $725 billion during the current year, most of which is focused on equipment for artificial intelligence data centers.

In 2024, ByteDance had raised about $10.8 billion through more than 20 international and Chinese banks and financial institutions, and used part of the proceeds to refinance a $5 billion credit facility it had obtained in 2021.

Although expectations remain regarding the company going public, it continues to focus on its core activities in the areas of artificial intelligence and social media.