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

Microsoft’s cloud AI business was on track to generate $1 billion in annual revenue, according to The information, but the report notes that TikTok You may not need these features as much if you develop your 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 its own LLM:

This practice is generally considered a faux pas in the AI ​​world. It also directly violates OpenAI principles Service Terms, which states that its model output cannot be used “to develop any artificial intelligence models that compete with our products and services.” Microsoft, through which ByteDance is purchasing its OpenAI access, have the same policy.

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