TikTok owner ByteDance’s chief warns against mediocrity as AI brings disruption
BYTEDANCE’S chief executive officer Liang Rubo warned employees at a company-wide meeting on Tuesday (Jan 30) that the TikTok owner risks becoming complacent and slipping into mediocrity as it faces challenges from newer startups.
Liang said the Beijing-based company’s rapid expansion in recent years had made it less efficient, and it had not paid enough attention to groundbreaking artificial intelligence (AI) technology, according to a ByteDance post about the meeting on social media.
“Our company is not sensitive enough (to new technologies),” Liang said. “For example, discussions about GPT did not appear in our half-year tech review until 2023, although GPT-1 was already released in 2018.”
GPT refers to a machine-learning technique that has given OpenAI’s ChatGPT chatbot human-like accuracy.
ByteDance is often seen as the world’s leading company on algorithms because its flagship apps such as TikTok, Douyin and Toutiao are powered by commanding recommendation engines.
But the company, nicknamed “App Factory” due to its aggressive iteration of mobile applications, has been slow to the AI race that is disrupting the technology sector.
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Other Chinese tech tycoons, ranging from JD.com founder Richard Liu to Tencent chairman Pony Ma, are also now calling on their companies to be more efficient and refrain from becoming complacent.
Somewhat echoing comments from Ma and Liu late last year, Liang called for a renewed entrepreneurial spirit in the company, saying he fears ByteDance could slip into mediocrity.
Liang, however, adopted a gentler tone than the two peers, saying his company is still doing fine and there are still many things to look forward to at ByteDance.
ByteDance released its Doubao chatbot last year without much fanfare. In December, The Verge reported that ByteDance is using OpenAI’s tech to build its own large language model. OpenAI eventually suspended the Chinese firm’s account.
Competition at home is led by Baidu, which has declared its chatbot is as good as OpenAI’s advanced GPT-4.
Baidu’s Ernie Bot has attracted more than 100 million users since its public rollout in August, the Chinese company said last month.
Still, ByteDance’s sales surged in 2023 to more than US$110 billion, Bloomberg News reported, potentially overtaking arch-foe Tencent Holdings in a sign that TikTok’s fledgling e-commerce business is driving growth at a time of economic malaise.
Highlighting ByteDance’s late start on AI foundation models, Liang noted that the companies with better models created them between 2018 and 2021.
“For many good startup teams, they are very familiar with the industry. They can quickly spot any new projects appearing on GitHub, and then they start seeking acquisition or partnership opportunities,” he said, referring to the online depository for computer codes.
Liang added that ByteDance was suffering from too much internal red tape as the company expanded, with it now taking six months to work on projects that a startup could complete in one month.
Separately, on Tuesday, Universal Music Group warned that it would pull its songs, which include those by Taylor Swift and The Weeknd, from TikTok after a breakdown in talks over issues such as the compensation of artists.
In an open letter, Universal accused TikTok of “trying to build a music-based business, without paying fair value for the music”. It noted other problems, such as large amounts of AI-generated recordings on the platform, alongside what it called a lack of effort to deal with infringements on artists’ music.
Both sides have been discussing the terms of a new agreement, with their existing contract expiring on Wednesday. But their deal has not been renewed.
Among the issues raised in talks were appropriate compensation for artists and songwriters, online safety for users, and the protection of artists from the harms of artificial intelligence, Universal added in its letter.
But as negotiations proceeded, Universal said that “TikTok attempted to bully us into accepting a deal worth less than the previous deal, far less than fair market value and not reflective of their exponential growth”.
Major music companies earn royalty payments from streaming and social media platforms. Universal said, however, that TikTok proposed paying “a rate that is a fraction of the rate that similarly situated major social platforms pay”.
TikTok said that it was “sad and disappointing that Universal Music Group has put their own greed above the interests of their artists”. Calling Universal’s characterisations “false,” it said the label had “chosen to walk away from the powerful support of a platform with well over a billion users that serves as a free promotional and discovery vehicle for their talent”.
A person familiar with the matter told AFP that all music licensed by Universal “will be removed from TikTok in the coming days, starting on Jan 31”. The source added that TikTok “has agreements in place with all other major and independent labels”.
“TikTok is not a music streaming platform and should not be licensed as such,” said the source, stressing that users cannot play full songs on TikTok and are limited to a maximum cap of 60 seconds of music in their video creations.
Despite TikTok’s large user base, it accounts for just about 1 per cent of Universal’s total revenue, the label said.
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