In the first half of this year, Doubao, an application developed by ByteDance, boasted over 200 million daily active users. However, its daily revenue remained below 1 million yuan, primarily generated through e-commerce commissions. During the same period, its daily operational costs surged to tens of millions of yuan, significantly higher than those of Bilibili. Given the substantial costs associated with AI operations, ByteDance has recalibrated its AI resource allocation strategy. The focus has shifted from the consumer-centric Doubao app to enterprise services.

In the enterprise services domain, ByteDance’s video generation model, Seedance, has demonstrated outstanding performance. It has achieved an annualized revenue of 2 billion US dollars and a gross margin as high as 70%, effectively offsetting the computational expenses incurred by Doubao. Seedance utilizes a Mixture of Experts (MoE) architecture, which places lower demands on inference chips. Furthermore, its core team is streamlined, ensuring efficient cost management. Seedance has emerged as a vital production tool for AI-simulated human dramas and comic-based dramas.

In contrast, Doubao faces considerable hurdles in commercializing its offerings to the general consumer market. E-commerce transaction volumes have been sluggish, and promoting its paid version has proven challenging due to the prevailing poor user payment habits in the domestic market and intense market competition.

Currently, the revenue growth rate of Seedance has experienced a slight deceleration, prompting the need to explore additional industry applications. Moreover, ByteDance and other major companies encounter numerous challenges in their AI investments. These include monetizing investments in computational power centers, the difficulty of converting Doubao’s user base into revenue streams, fierce competition in the AI programming market, and fostering payment habits in the domestic market.