ByteDance Ltd., the owner of TikTok, has seen its valuation soar past $400 billion, as key investors, including SoftBank Group Corp.'s Vision Fund, Fidelity Investments, and T. Rowe Price Group Inc., have marked up their assessments of the Chinese tech giant. The surge in valuation comes despite geopolitical uncertainty surrounding TikTok's operations in the United States, as ByteDance's expanding artificial intelligence (AI) business continues to drive growth.
SoftBank's latest internal valuation of ByteDance reached more than $400 billion in December, factoring in the company's advancements in AI, particularly its chatbot Doubao, according to people familiar with the matter. Meanwhile, Fidelity Investments and T. Rowe Price valued ByteDance at approximately $410 billion and $450 billion, respectively, based on regulatory filings submitted to the U.S. Securities and Exchange Commission (SEC) in November.
The revised valuations reflect ByteDance's strong revenue growth and its leadership in AI development in China. The company has positioned itself as a competitor to firms such as DeepSeek, an AI startup that has fueled renewed optimism in China's technology sector. ByteDance's Doubao chatbot, which boasts 75 million active users, and its cost-efficient vision-understanding model, which is reportedly 85% cheaper than industry averages, have been key drivers of its recent success.
Despite the positive outlook, ByteDance remains vulnerable to geopolitical risks, particularly regarding TikTok's uncertain future in the U.S.. SoftBank, in its valuation assessment, reportedly assigned zero value to TikTok's U.S. operations, given the ongoing threats of a potential ban or forced divestiture by American lawmakers. If TikTok manages to avoid regulatory restrictions, analysts suggest ByteDance's valuation could rise even further.
The company's stock buyback program in 2023 valued shares at $180 each, equating to a total company valuation of $300 billion. This represented a significant increase from $268 billion in 2022, reflecting growing investor confidence. However, some investors continue to price ByteDance as low as $240 billion, though few sellers are willing to part with their shares at such levels.
