TikTok is one of Microsoft’s largest cloud AI customers.

According to online sources, the short video service TikTok, owned by the Chinese company ByteDance, is one of Microsoft’s largest clients in the field of artificial intelligence cloud computing. As of March, TikTok was paying Microsoft nearly $20 million a month for access to OpenAI’s AI algorithms. However, this may soon change if ByteDance creates its own neural networks.

Image source: Antonbe/Pixabay

Last year, media reported that ByteDance was “secretly using” OpenAI algorithms to develop its Large Language Model (LLM). In the field of AI technology development, this approach is condemned by many companies. In addition, this is a direct violation of OpenAI’s user agreement, which states that neural network-generated content cannot be used “to create language models that compete with the developer’s products and services.” Microsoft, through which ByteDance accesses OpenAI algorithms, has a similar policy.

Following reports that ByteDance was using OpenAI AI algorithms to create its language model, the Chinese company’s account was suspended. OpenAI explained this by the need to conduct an investigation to establish whether the license agreement had been violated. At the same time, a ByteDance representative told CNN that the company uses technology “to a very limited extent” to develop its own language models.

Microsoft has entered into a multibillion-dollar investment agreement with OpenAI, making the software giant the exclusive provider of cloud AI computing. In addition, Microsoft had to spend “several hundred million dollars” to build a supercomputer to run the ChatGPT algorithm. Microsoft’s financial report for the fourth quarter of fiscal 2024, released this week, said revenue at its Azure cloud division grew 29%, just shy of the 30% to 31% previously forecast.