ByteDance's AI investments slash profits as TikTok Shop drives overseas revenue surge

ByteDance's profits plummeted by 70 percent due to heavy investments in artificial intelligence, according to reports from Securities Times and 36Kr on Monday. Despite this decline, overseas revenue grew by nearly 50 percent, significantly outpacing China's 20 percent growth, with TikTok Shop's gross merchandise value increasing almost 70 percent last year. For the first time, overseas markets contributed over 30 percent of total revenue, up from 25 percent in 2024. Vice-president Li Liang of the Douyin department clarified that the profit drop stemmed from international accounting standards factoring in employee stock option costs, not reflecting actual operations; excluding these, overall profit and revenue expanded. He noted the operating profit margin slightly decreased in late 2025 due to slower Douyin e-commerce growth and higher investments in emerging ventures, though the decline was less severe. ByteDance, a private firm that keeps financials undisclosed, did not comment on the reports. The AI push has reshaped its financial landscape while TikTok Shop fuels international expansion.