ByteDance's Profit Plummeted 70% — Is Zhang Yiming's AI Bet Paying Off?

Last Wednesday night, I nearly choked on my coffee reading the news.

ByteDance’s 2025 full-year net profit dropped more than 70% year-over-year.

Honestly, my first reaction was: are you serious?

This company is literally called the ‘cash printing machine’ of Chinese tech. Douyin, Toutiao, TikTok — every business is a revenue powerhouse. And now profits crashed by seven-tenths?

After reading through various analyses, the picture became clearer: it’s the AI spending.

Where’s the money going?

ByteDance ramped up AI investments significantly in H2 2025: premium chip procurement (Nvidia H100s/H200s, nearly impossible to source), foundation model R&D (Doubao LLM, multimodal AI), and inference compute.

Zhang Yiming personally attending Seed team meetings — when the founder gets this involved, it’s an all-in bet.

What about the revenue?

The good news: ByteDance’s top line isn’t bad. Full-year revenue grew approximately 20%, overseas revenue exceeded one-third of total for the first time, TikTok Shop GMV grew nearly 70%.

But costs are growing even faster. Financial analysts call this ‘strategic losses’ — spending now to secure a position later.

My take

Honestly, this reminded me of ByteDance in 2019. Everyone asked: has growth hit a ceiling? Then they launched TikTok e-commerce and surged again.

This feels like that moment replayed, except the stakes are much higher.

Bulls: AI is the AGI ticket, invest now or be left out.

Bears: 70B revenue, 7B profit, all going into AI — sustainable?

My read: if ByteDance’s AI investments generate positive returns in 2-3 years, current spending makes sense. But if the AI payoff takes longer, or models never catch OpenAI/Anthropic, that 70% drop becomes a black hole.

One thing’s certain: Zhang Yiming isn’t gambling blindly. But this time, the chips are massive.

What’s your take? Drop a comment below.