By March, The Information said, TikTok was paying Microsoft about $20 million a month to use OpenAI’s models.
As of March, TikTok was paying Microsoft about $20 million a month, or nearly a fourth of its increasingly profitable cloud division’s earnings, according to a source who spoke with The Information.
The Information claims that Microsoft’s cloud AI division was expected to generate $1 billion in revenue this year; however, the report also points out that TikTok would not require these capabilities as much if it builds its large language model (LLM).
According to allegations from the previous year, ByteDance, the parent firm of TikTok, was “secretly using” OpenAI’s technology to produce an LLM of its own:
In the field of AI, this practice is typically seen as inappropriate. The terms of service of OpenAI, which prohibit using its model output “to develop any artificial intelligence models that compete with our products and services,” are also clearly broken by this. The same principle applies to Microsoft, through which ByteDance is purchasing its access to OpenAI.
In response to that report, OpenAI suspended ByteDance’s account in order to look into any developer licensing violations. ByteDance said to CNN at the time that it was utilizing the technology “to a very limited extent” to assist in the creation of its own models.
In addition, Microsoft has built a supercomputer to power ChatGPT for “several hundreds of millions of dollars,” and it has an exclusive cloud provider agreement with OpenAI thanks to a multibillion-dollar investment arrangement.
Microsoft reported Q4 2024 earnings on Tuesday, with Azure revenue growth of 29%, narrowly falling short of the 30 to 31% growth it had previously anticipated in its last earnings release. According to CFO Amy Hood, Microsoft expects Azure revenue to grow by 28–29 percent in the first quarter of 2025.
