ByteDance sharpens AI focus as annualised revenue reaches US$4b

ByteDance has integrated its enterprise collaboration unit into other teams, a move that sharpens its focus on using artificial intelligence to serve corporate clients as annualised AI revenue of US$4 billion pushes it to the front of the pack in China, according to sources. The Beijing-based company decided to integrate the product team of office tool Lark, known as Feishu domestically, into the product team in charge of the Doubao AI chatbot, according to an internal memo seen by the South China Morning Post on Thursday. The new bigger section would be led by Zhao Qi, who previously oversaw Doubao only, while David Xie Xin, the CEO of the Lark unit, would report to Zhao, the memo said. Meanwhile, Lark’s sales, marketing and customer services personnel would merge with a team under the cloud unit Volcano Engine, establishing a new department responsible for sales and customer service for the firm’s model-as-a-service and software-as-a-service offerings, as well as other cloud services, according to the memo. Tan Dai, the president of Volcano Engine, would take over the new team, the memo said. Similarly, Lark’s development and infrastructure team would be merged into Flow, a division that focuses on AI applications. ByteDance said the moves aimed to build “stronger AI product competitiveness and customer service capabilities”. While the reorganisation reduces the internal influence of Lark, once considered a promising business, Doubao has emerged as a strong revenue source. ByteDance’s annual recurring revenue (ARR) – a metric that projects current monthly subscription income over a 12-month period – from large language models had reached US$4 billion this month, sources said. The projected income is the largest known to the public among Chinese AI rivals. Zhipu, known as Z.ai internationally, recorded ARR of US$1 billion in July, while DeepSeek approached US$500 million, according to reports by Chinastarmarket.cn and The Information this month. The ARR of Moonshot AI, the developer of the Kimi K3 model, reached US$300 million in June, Bloomberg reported. Alibaba Group Holding said in May that the projected ARR from AI models and applications would surpass 10 billion yuan (US$1.5 billion) in the second quarter and triple by the end of the year. Alibaba owns the SCMP. Chinese AI firms still lagged well behind US AI companies Anthropic and OpenAI, which had ARRs of US$74.1 billion and US$41.3 billion, respectively, according to estimates from data platform TickerTrends. ByteDance, which owns the TikTok and Douyin short-video apps, has been acting quickly to monetise AI. In early May, the company announced optional subscription plans for the Doubao chatbot, with charges between 68 yuan and 500 yuan per month. A cheaper annual package is also available. The announcement lost the firm around 6.1 million monthly active users in May, but Doubao maintained its status as China’s most popular AI app with 330 million users, according to Aicpb.com, which tracks AI platforms.