ByteDance, the owner of TikTok, has secured a substantial loan of $29.6 billion, equivalent to approximately R$ 151.8 billion, from around 30 banking institutions. This amount exceeded the initial target of $20 billion (R$ 102.6 billion) due to high demand from creditors.
This financing represents the second largest in Asia this year. According to Reuters, the operation involved banks located in China, the United States, Europe, and Singapore, and aims to support ByteDance's and Douyin's artificial intelligence plans.
ByteDance's loan was coordinated by Citigroup, and JPMorgan also participated in the operation. It is noteworthy that Chinese banks were responsible for over 60% of the total contract value, which has an initial term of three years with the possibility of extension for another two years.
Although ByteDance informed creditors that the funds would be used for general corporate expenses, sources consulted by Reuters indicated that the primary purpose is to finance artificial intelligence-related initiatives.
Unusual Loan Structure
A notable aspect of the transaction was the absence of any collateral offered by ByteDance, whether in assets or shares, to secure the $29.6 billion. A source close to the deal highlighted the magnitude of the agreement and the confidence placed in the company by the banks, stating that it is unusual to see such a large loan without collateral, suggesting that the banks primarily trust ByteDance's name.
Additionally, the new financing has an important characteristic: the dollar-denominated funds will be applied to projects located outside of China, coinciding with a period of intense expansion of AI infrastructure in Southeast Asia.
ByteDance is among the companies contracting capacity in various data centers under construction in the region. This expansion is part of a broader competition for essential infrastructure for training and running advanced artificial intelligence models.
Previously, Reuters had reported that the company was negotiating the acquisition of AI inference chips for Iluvatar CoreX and evaluating a similar deal with Baidu. This move implies considerable investments in several areas.
Lian Jye Su, Chief Analyst at Omdia, pointed out that the company is engaged in two fronts requiring significant financial input: 'ByteDance is competing with local hyperscalers in AI data centers and with global hyperscalers in multimodal AI models. Both require massive investments, especially if we look at the capital investment allocated to AI training by companies like OpenAI and Google.'
In September 2024, ByteDance had already raised $10.8 billion (approximately R$ 55.4 billion) through a loan with about 20 international and Chinese banks. The current agreement represents almost triple that previous amount, considerably expanding the company's financial capacity for its artificial intelligence projects.