Abu Dhabi AI firm G42 has acquired a stake of more than $100 million in ByteDance, valuing the Chinese internet firm at around $220 billion, Bloomberg reported, citing sources with knowledge of the matter.
The valuation is lower than the $300 billion set by TikTok’s parent company during a recent share buyback programme.
Another fund bought into ByteDance at $225 billion shortly after, sources said. ByteDance’s value has fluctuated significantly due to uncertainty surrounding the possible banning of TikTok in the US on national security grounds.
However, ByteDance’s popularity with advertisers has resulted in the service generating an estimated $12 billion in revenue in 2022 alone.
Sheikh Tahnoon bin Zayed Al Nahyan, UAE royal and son of the nation’s founding father Sheikh Zayed bin Sultan Al Nahyan, controls G42.
Sheikh Tahnoon has built a portfolio through the firm in everything from cloud computing to vaccines and driverless cars.
G42’s $10 billion 42XFund, which has additional financial backers, invests in technology companies across emerging markets, the report said.
The firm’s recent hiring of Jason Hu, the former investment head with China’s JD.com, indicates its plans to expand its footprint across Asia. The company’s acquisition of the ByteDance stake reflects its growing enthusiasm for AI and could be a bet on the longer-term potential of Chinese tech giants.
In September last year, ByteDance offered to buy back $3 billion of its own shares at a valuation of about $300 billion.
The Chinese company, which is also backed by SoftBank Group Corp. and Temasek Holdings Pte, has explored options for an IPO in Hong Kong or the US. However, due to global market volatility, the IPO is still a ways off, the report added.
ByteDance has been one of a handful of Chinese app developers to hit the big time abroad, alongside upstarts like fast-fashion purveyor Shein Group, AliExpress, and PDD Holdings Inc.’s bargains app Temu.
According to the report, ByteDance’s marquee service, TikTok, drew advertisers keen on hitting a more youthful demographic, and it has carved out a niche selling goods to millions of social media users via livestreams across the world.
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