According to a report by The Information, TikTok has spent almost $20 million per month to access Microsoft’s OpenAI models as of March, becoming one of Microsoft’s biggest AI cloud computing customers.
This week, Microsoft revealed its fiscal fourth-quarter earnings report, disclosing revenue growth of 29%, which failed to meet analysts’ expectations of 30 to 31%. However, the CFO of Microsoft, Amy Hood, said that in Q1 2025, Microsoft is expecting around 28–29% Azure revenue growth.
The reports also revealed that the sum TikTok spent on OpenAI accounted for nearly a quarter of the revenue generated by its profitable cloud business, though it was expected to generate $1 billion annually.
However, the media outlet revealed that such expenses for Microsoft could backfire, as TikTok and its parent company, ByteDance, plan to develop their own AI technology and Large Language Models (LLM).
Some reports have found that TikTok secretly uses OpenAI’s source technology to create its LLM.
Following this report, OpenAI suspended ByteDance’s account to look into the potential violation of the developer license. In its reply, ByteDance said that it was only using the technology “to a very limited extent” to create the models.
The other reason this investment can be a risk to TikTok is President Biden’s April announcement, which said that the video platform will be banned or sold in the US in nine months.
