R&D investment close to the sum of BAT! ByteDance aims to be China's OpenAI?

The Doubao "Family Bucket" is booming in the market, and ByteDance's R&D investment is close to the sum of BAT, with ByteDance becoming China's OpenAI.

Zhejiang Merchants Securities pointed out in a report on the 25th that ByteDance has made its performance-leading Doubao large model freely available to the public, demonstrating signs that ByteDance is likely to lead the industry in terms of investment intensity and market share.

R&D Investment Close to the Sum of BAT

Specifically, Zhejiang Merchants Securities stated that ByteDance is increasing traffic investment, expanding capital expenditure, and aggressively expanding its team, with R&D investment significantly ahead of its peers. This can be compared to Microsoft's increased investment in OpenAI; ByteDance in China may be analogous to OpenAI in the United States.

In terms of expenditure scale, Zhejiang Merchants Securities pointed out:

ByteDance is making huge investments in AI, with capital expenditure reaching 80 billion yuan in 2024, close to the total of Baidu, Alibaba, and Tencent (about 100 billion yuan). In 2025, ByteDance's capital expenditure is expected to reach 160 billion yuan, aiming to build a self-controlled large-scale data center cluster, with about 90 billion yuan allocated for AI computing power procurement and 70 billion yuan for IDC infrastructure and network equipment such as optical modules and switches.

The booming development of overseas large models relies on substantial computing power investment, and ByteDance's massive computing power expenditure is expected to drive the overall development of China's AI industry. ByteDance has a high estimate for future token consumption and is expected to continue increasing its computing power investment. In September 2024, Wu Di, head of intelligent algorithms at ByteDance's Volcano Engine, stated that the daily token consumption of Doubao is expected to exceed 100 trillion by 2027, more than 100 times the original amount.

In terms of promotional efforts, Zhejiang Merchants Securities stated that ByteDance has adopted a large-scale advertising investment to promote its AI products:

For example, the advertising expenditure for the Doubao intelligent assistant from April to May 2024 was nearly 18 million yuan, and it soared to 124 million yuan in early June. At the same time, the company leverages the internal traffic advantages of platforms like Douyin to drive traffic to its AI products. In an environment where many large models are paid, the Doubao large model is made freely available to the public while ensuring performance, which helps rapidly increase the user base, expand market share, and acquire a large training corpus.

Regarding talent investment, Zhejiang Merchants Securities stated:

According to the Securities Times, the company's founder Zhang Yiming is personally responsible for recruiting AI talent from competitor companies and has repeatedly emphasized the pursuit of "general artificial intelligence" internally. Members of the large model team come from ByteDance's core departments, with the language part led by the search team and the image part led by the intelligent creation team under the product development and engineering architecture department.

Product Alignment with GPT-4

In terms of products, the Doubao large model family has been newly upgraded to align with GPT-4. Zhejiang Merchants Securities stated:

On December 18, 2024, the ByteDance Volcano Engine Winter FORCE Power Conference will be held, and the Doubao large model family will be newly upgraded. The Doubao General Model Pro: comprehensive task processing capability has improved by 32% compared to May, fully aligning with GPT-4o, with a usage price only 1/8 of the latter In addition to upgrading the models, Volcano Engine has also upgraded three platform products: Volcano Ark, Button, and HiAgent, helping enterprises build their own AI capability centers and efficiently develop AI applications.

As of November 2024, according to AI product rankings, the monthly active users of Doubao App have approached 60 million, second only to OpenAI's ChatGPT, ranking second globally, with a MAU growth rate of 16.92%.

In addition, ByteDance, as an AI algorithm-driven company, has a rich and diverse range of AI application scenarios downstream for the implementation of large model technology. Zheshang Securities introduced:

1. Recommendation algorithms: Large models, as more powerful AIs, are expected to enhance the effectiveness of recommendation, advertising, and search algorithms, thereby empowering ByteDance's core businesses such as Douyin and Toutiao. 2) Content creation: AIGC empowers UGC and PGC. The AIGC sci-fi short drama series "Sanxingdui: Future Revelation," co-produced by Douyin, has been launched on Douyin and all platforms. Creators on platforms like Douyin can also assist in creation by using Doubao's "one-click photo editing" and "one-click poster" features. Tomato Novel has integrated character robots that can simulate conversations with readers based on characters in the novels. 3) Office applications: Feishu has launched intelligent partners that realize functions such as extracting meeting highlights, generating documents, spreadsheets, mind maps, and data analysis, among others