TikTok Owner ByteDance Lands a Near-$30 Billion Loan to Power Its AI Buildout

ByteDance has just closed a syndicated loan of 29.6 billion dollars. It is the second largest dollar transaction completed in Asia this year. For TikTok’s parent company, the goal is clear: to finance its expansion in AI without relying solely on its profits. 

Banks are betting on TikTok’s cash flow

The operation recalls that of SoftBank in March, when a 40 billion dollar bridge financing was arranged around its stake in OpenAI. However, the comparison ends there.

SoftBank borrowed against shares, awaiting longer-term refinancing. ByteDance, on the other hand, relies on an activity that already generates revenue. Banks are therefore betting on the cash flows of TikTok and Douyin, rather than on the value of a securities portfolio, according to Bloomberg.

The arrangement remains particular, however. ByteDance is a private company and its accounts are not accessible to the public. About thirty institutions will therefore commit billions based on financial information that users and regulators do not have access to. Reuters reported on September 4 that Chinese banks had subscribed to more than 60% of the allocation, alongside American, European, and Singaporean lenders. 

Up to 70 billion in Capex per year, a figure to be confirmed

At ByteDance, general corporate use means computing power. ByteDance is considering up to 70 billion dollars in AI infrastructure spending per year, a level that would place it alongside American hyperscalers, according to Bloomberg sources. This figure contrasts with the previously mentioned budget of 160 billion yuan (22.7 billion dollars), without any comment from the company: internal scenario, not a decided decision.

Money must also leave China. ByteDance has become an anchor client for data centers under construction in Southeast Asia, an engagement that secures their financing. The group runs a 10 trillion parameter model in Inner Mongolia and pays more than one billion dollars per year to Microsoft Azure for OpenAI models, while financing the hardware supposed to make it independent. 

American export controls bar it from access to the most advanced Nvidia chips, turning to custom Arm or RISC-V silicon and Chinese suppliers. The same power therefore costs more.

Private debt that changes scale

The operation has almost tripled that of 2024, 10.8 billion raised from about twenty lenders. It signals financing of AI through bank debt, not just profits: AI debt among big tech has exceeded 350 billion dollars, and the operation moves part of this credit outside the United States. 

“ByteDance competes with local hyperscalers on data centers and globals on multimodal models“, summarized Lian Jye Su, chief analyst at Omdia.

The shift also concerns crypto. While bitcoin miners repurpose their installations for AI, the rush on data centers soaks up capital that used to go to hashrate. This competition for electricity and GPUs is played on balance sheets, while OpenAI aims for an 852 billion dollar stock market valuation, a path ByteDance refused.

The arrangement remained to be finalized as of September 4, allocations pending confirmation. The real test at maturity, in 2029 or later: if AI revenues are slow to take off, the debt will weigh, and an American legislative push against TikTok would attack the stream that underpins the loan.