(Yicai) Feb. 17 -- ByteDance was slower than artificial intelligence startups to recognize and capitalize on the new opportunities in large language models, putting the Chinese internet giant at a disadvantage, Chief Executive Officer Liang Rubo has told a company-wide meeting.

Leading AI startups were set up and began work between 2018 and 2021, while ByteDance only started discussing frontier models such as OpenAI's GPT in its semi-annual technical review in 2023, Liang told employees on Feb. 13.

Liang’s observations follow the release of an updated LLM from Chinese AI developer DeepSeek last month, which was described by Silicon Valley venture capitalist Marc Andreessen as an “AI Sputnik moment.” DeepSeek-R1’s performance compares favourably with some leading LLMs, but at much lower cost.

Liang reflected on the surge of interest in DeepSeek at the all-hands meeting, noting that DeepSeek-R1's innovations, the long-chain thinking model, was not an industry first. San Francisco-based OpenAI released its CoT model last September, he noted.

ByteDance, which owns TikTok, recognized the significant technological shift but did not respond quickly enough, Liang said. The Beijing-based company could have achieved similar results earlier had it been more attentive, he pointed out.

Departing from last year's key words “sense of crisis,” Liang reiterated the concept of “pragmatic romance,” first introduced by ByteDance founder Zhang Yiming at an anniversary celebration in 2019.

ByteDance will focus on pursuing the upper limits of “intelligence” this year, rather than chasing the daily active users of any specific product, such as its Doubao AI assistant, Liang said, adding that this approach will inspire more experimentation and ensure critical technological milestones are not overlooked. That will include exploring new interactions and enhancing economies of scale, he said.

ByteDance formed its Flow division focused on AI applications in the second half of 2023. Despite Doubao leading the domestic market by DAUs in the fourth quarter of last year and ByteDance planning to release a video generation model this year, DeepSeek was able to burst onto the global scene.

DeepSeek's DAUs exceeded 20 million within 21 days of its launch on Jan. 11, ranking second worldwide behind only ChatGPT. DeepSeek-R1 topped the free download charts on Apple's App Store in China and the United States on Jan. 27, surpassing ChatGPT in the latter market. A day later, it surpassed Doubao to become the most-used Chinese LLM.

ByteDance’s executives also shared some business updates at the meeting. The gross merchandise value of social media platform Douyin E-commerce reached nearly CNY3.5 trillion (USD482.5 million) last year, ranking third in the industry. 

TikTok continues to grow in Southeast Asia, while ByteDance seeks solutions for the short-video platform's US operations, the executives noted.

Editor: Martin Kadiev