Technology has been advancing rapidly, especially with the rise of generative AI. This innovative field has brought about significant changes, and we continue to learn more about its potential daily.
A notable development is the growing relationship between TikTok and Microsoft. The famous short video platform has emerged as one of the largest customers of Microsoft’s AI cloud services.
TikTok and Microsoft: A multimillion-dollar collaboration
According to a report by The Information, TikTok was paying Microsoft nearly $20 million a month to access OpenAI models as of March 2024. This substantial figure accounts for almost a quarter of the revenue generated by Microsoft’s cloud division projected to reach $1 billion in annual revenue.
The partnership between TikTok and Microsoft has not been without controversy. ByteDance, TikTok’s parent company, has used OpenAI’s technology to develop its large language model (LLM). This practice violates OpenAI’s terms of service, prohibiting using its models to create competing products. Consequently, OpenAI suspended ByteDance’s account to investigate a potential breach of its developer license.
Microsoft, meanwhile, has heavily invested in its cloud infrastructure, including building a supercomputer to power ChatGPT. In its Q4 2024 earnings report, Microsoft disclosed a 29% growth in revenue from Azure, its cloud platform. Although this growth is slightly below projections, it still highlights the substantial expansion of its cloud business.
The collaboration between TikTok and Microsoft exemplifies how strategic partnerships can spur growth and innovation in the tech industry. As ByteDance continues to develop its models, it will be interesting to observe how this relationship evolves and what its impact is on the future of cloud computing.
