An internal report indicates that ByteDance’s 2025 net profit fell more than 70% year over year, even as the company continued to post solid revenue growth. The sharp decline highlights how aggressive investment in artificial intelligence is reshaping the company’s earnings profile.
Revenue kept expanding
On the top line, ByteDance’s domestic revenue grew by about 20% in 2025, while overseas revenue nearly surged 50%, driven mainly by the expansion of TikTok Commerce. As international operations gained more weight, the share of overseas business increased from around 25% in 2024 to more than 30% in 2025, underscoring the company’s growing global footprint.
AI investment pressured profitability
However, stronger revenue did not translate into stronger profits. According to the report, the main reason behind the steep profit decline was ByteDance’s heavy investment in AI technology, including procurement of AI chips and spending on foundation model development and infrastructure for AI initiatives such as Doubao. These costs appear to be substantial and focused on building long-term technical capacity rather than near-term returns.
The pressure became especially visible in the third and fourth quarters, when those investments significantly narrowed the company’s net profit margin. In effect, ByteDance appears to be sacrificing short-term profitability in exchange for a stronger strategic position in AI. The pattern is consistent with a broader trend among major technology companies that are prioritizing AI expansion over immediate earnings efficiency.
Overall, ByteDance’s 2025 performance suggests that AI spending has become a decisive factor in its financial results. For the market, the next key question will likely be when these large-scale investments begin to generate more durable commercial returns.