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).

My colleague Alex Heath revealed last year that ByteDance, the parent firm of TikTok, was “secretly using” OpenAI’s technology to produce an LLM of its own:

This practice is generally considered a faux pas in the AI world. It’s also in direct violation of OpenAI’s terms of service, which state that its model output can’t be used “to develop any artificial intelligence models that compete with our products and services.” Microsoft, which ByteDance is buying its OpenAI access through, has the same policy.

In response to that report, OpenAI suspended ByteDance’s account to look into any developer licensing violations. ByteDance said to CNN at the time that it was utilizing the technology “to a minimal extent” to assist in creating its models.

In addition, Microsoft has built a supercomputer to power ChatGPT for “several hundreds of millions of dollars,” 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.