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TikTok is one of Microsoft’s biggest AI cloud computing customers

Microsoft’s cloud AI business was on track to earn $1 billion in annual revenue, according to The Information, but the report notes that TikTok may not need these capabilities this heavily if it develops its own large language model (LLM).

Last year, my colleague Alex Heath reported that TikTok’s parent company, ByteDance, was “secretly using” OpenAI’s technology to create an LLM of its own:

This practice is generally considered a faux pas in the AI world. It’s also in direct violation of OpenAI’s terms of service, which state that its model output can’t be used “to develop any artificial intelligence models that compete with our products and services.” Microsoft, which ByteDance is buying its OpenAI access through, has the same policy.

Microsoft also has a multibillion-dollar investment deal making it OpenAI’s exclusive cloud provider and has spent “several hundreds of millions of dollars” building a supercomputer to power ChatGPT. In its Q4 2024 earnings report released Tuesday, Microsoft revealed Azure revenue growth of 29 percent, just missing the 30 to 31 percent its last earnings release projected. CFO Amy Hood said that in Q1 2025, Microsoft anticipates around 28–29 percent Azure revenue growth.

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