ByteDance plans to spend $12bn on AI chips this year

Good morning and welcome back. On today’s agenda:

• ByteDance plans $12bn bet on AI chips

• Trump threatens Putin with more sanctions

• China sees room to avert a trade war with US

TikTok owner ByteDance plans to spend more than $12bn on artificial intelligence infrastructure this year, betting on the cutting-edge technology for new growth as its popular video-sharing app comes under pressure in the US.

The Beijing-based company has budgeted Rmb40bn ($5.5bn) to acquire AI chips in China in 2025, according to two people familiar with the plans, which would double the amount it spent last year. The group also plans to invest about $6.8bn overseas to beef up its foundation model training capabilities using advanced Nvidia chips.

Beijing has given Chinese tech companies informal guidance to buy at least 30 per cent of their chips from the country’s own suppliers, the people added.

ByteDance, having emerged as the frontrunner in China’s AI race, is doubling down to build out its own AI infrastructure to train its foundation model, as well as to implement AI functions across its various platforms.

Here’s what else we know about the TikTok parent’s plans.

Here’s what else we’re keeping tabs on today:

• Economic data: Singapore publishes December inflation data, South Korea reports advance fourth-quarter GDP and Taiwan releases industrial output figures.

• Thailand: A law allowing same-sex marriage takes effect, making the country the first in south-east Asia to recognise marriage equality (Associated Press).

• Japan: The Bank of Japan holds its monetary policy meeting ahead of an expected rate rise on Friday.

• Results: SK Hynix, Hyundai Motor Company Q4 and Nidec report earnings.

This Friday, join consumer editor Claer Barrett, writer of the Sort Your Financial Life Out newsletter series, as she discusses how to invest in 2025 with other FT experts. Register for free.

Five more top stories

1. Donald Trump has warned Vladimir Putin that the US is ready to punish Russia with a barrage of new trade restrictions if Moscow fails to reach an agreement soon to end the war in Ukraine. The Trump administration believes there are more ways that the US could tighten the screws on Russia financially, in addition to the sweeping sanctions Joe Biden imposed on Moscow after it invaded Ukraine in 2022.

2. Pakistan will request the extradition of the billionaire property tycoon Malik Riaz Hussain from the United Arab Emirates, targeting a powerful businessman linked to the jailed former prime minister Imran Khan. The developer said fraud allegations by Pakistan’s anti-corruption watchdog are an attempt to “blackmail” him. Here are more details.

3. Two Iranian cargo vessels carrying a crucial chemical ingredient for missile propellant will sail from China to Iran over the next few weeks, according to intelligence from security officials in two western countries. Officials said the chemicals were being shipped to the Islamic Revolutionary Guard Corps, the elite arm of the Iranian military. Read the full story.

4. Elon Musk poured cold water on Stargate, a massive US artificial intelligence infrastructure project announced by Trump on Tuesday. “They don’t actually have the money”, the Tesla boss said about the $500bn initiative backed by OpenAI and SoftBank, in a rare break with the president. Here’s how OpenAI’s chief executive Sam Altman responded.

5. Exclusive: Chinese banks have been pitching to work on the blockbuster Hong Kong secondary listing of the world’s leading EV battery maker CATL for as little as 0.01 per cent in fees. The ultra-low pitches are a sign of the cut-throat competition in the territory’s once-lucrative listings market where business has significantly slowed.

News in-depth

Chinese officials now hope it may be possible to avert a second trade war with the US, after Donald Trump did not levy immediate tariffs and hinted at a potential broader deal involving TikTok’s ownership. There is “cautious optimism”, one expert said, but the question is what kind of deal would be acceptable to both sides. 

We’re also reading . . . 

• Alex Soros: The chair of Open Society Foundations sits down with FT editor Roula Khalaf to discuss his vision for the liberal megadonor his father created.

• Gaza ceasefire: Many Palestinians have returned to find only sand, twisted metal and shredded concrete where they used to live.

• The great liberal shrug: Having supposedly worried too much about Trump last time, people are overcorrecting, writes Janan Ganesh.

Map of the day

Britain’s defence minister warned Russian President Vladimir Putin that “we will not shy away from robust action” after telling parliament that a Russian spy vessel had been operating in UK waters for the second time since November.

Take a break from the news . . . 

Our film critic Danny Leigh remembers David Lynch, the American filmmaker who died recently at 78, and explains why interviewing him felt pointless even though no director meant more to him.