According to three people with firsthand knowledge of the situation, ByteDance has obtained a $29.6 billion loan from around 30 banks on Friday. The Chinese social media behemoth’s wager on AI research has sparked substantial interest from lenders.
Lenders’ enthusiasm for the industry, which requires ever-increasing capital, is demonstrated by the loan, which is the second-largest in Asia this year after SoftBank secured $40 billion in March to fund OpenAI initiatives.
According to the persons, banks from China, the United States, Europe, and Singapore are involved in the financing. Citigroup (C.N.) and JPMorgan (JPM.N.) are coordinating the three-year loan, which will soon be signed by ByteDance.
Requests for comment from ByteDance and JPMorgan were not immediately answered. Citi declined to comment. The loan was first covered by Bloomberg News on Thursday.
According to insiders who declined to be named because the information was classified, the owner of well-known social media apps Douyin and TikTok expanded the facility from an initial aim of $20 billion following an enormous reaction from lenders.
One of them said that more than 60% of the total has been subscribed to by Chinese banks.
Lenders were informed by ByteDance that the funding would be used for general corporate reasons, but the sources said that the money would primarily boost the company’s AI-related initiatives.
According to two of them, the facility has a three-year initial tenure with possibilities to extend for an additional two years.
ByteDance has increased its investment in AI. In June, Reuters revealed that the tech company was mulling a similar arrangement with Baidu (9888.HK) and was in talks with Shanghai-based Iluvatar CoreX (9903.HK), opens new tab, to buy AI chips for inference work.
Because ByteDance is not committing any assets or shares as collateral, the new dollar-denominated facility is unsecured, demonstrating how confidently lenders regard the company’s creditworthiness.
