TikTok lifts parent ByteDance to upper echelon of hyperscale data center spending

Ultra-popular TikTok harnesses so much data that its parent Bytedance is now the 7th-largest hyperscale data center investor in the world.
22 September 2021

People walk past the headquarters of ByteDance, the parent company of video sharing app TikTok, in Beijing on September 16, 2020. (Photo by GREG BAKER / AFP)

The rise of short-form video platform TikTok to become the most downloaded app of 2020 has been nothing short of meteoric – and has led to its owner ByteDance being recognized as one of the biggest data center investors in the world.

Analyst Synergy Research Group’s quarterly hyperscale data center market tracker data has demonstrated that from being a complete unknown outside of its native China just three years ago, ByteDance has now joined the ranks of other ultra-powerful data giants to become the world’s seventh-biggest data center spender.

Online retailer Amazon is still the world’s biggest data center spender, according to Synergy’s Q2 2021 research, out of the total number of hyperscale data center providers which has arisen to 659 by the end of that quarter – that is more than double the number of mammoth data centers since mid-2016.

Right behind Amazon in terms of data center investment is a who’s who of US tech giants Google, Microsoft, Facebook, and Apple; what was interesting this quarter was the emergence of ByteDance – riding off the notoriety of its phenomenally sought-after TikTok app – alongside two other major Chinese technology giants, e-commerce platform Alibaba in sixth place and gaming and software giant Tencent at the eighth spot.

While Amazon, Microsoft and Google account for over half of installed hyperscale data centers globally, the rapid ascent of the Chinese technology behemoths in data center spending signals just how entrenched their platforms have become globally, with troves of data being consumed and transmitted every minute.

While they may not rival the cloud giants (Amazon, Microsoft, Google, and IBM) yet in data center footprint expanse, the breakout performance by ByteDance drew the most attention as it is the newest entrant to the hyperscale data center top ten.

That rise is largely due to its uber-popular platform TikTok, which has established itself as the hottest new social sharing service in a very brief period. Some estimates peg its user base at nearly 690 million active monthly users.

The Synergy data outlines how outside of the Western cloud players (who possess 60 or more data center locations with a minimum of three in each of the four regions: North America, APAC, EMEA, and Latin America), most firms prefer either the US or China, “which account for over half of the major cloud and internet data center sites” as per the report.

The next most popular hyperscale data center locations are Japan, Germany, UK, Australia, Canada, Ireland and India, respectively – together they make up a quarter (25%) of the total hyperscale data centers globally.

ByteDance compatriots Alibaba and Tencent join Oracle as the outliers who have a noticeably broad data center presence. Otherwise, US firms like eBay, Apple and Twitter are primarily centered in the US, while internet companies like Baidu and JD.com have their data centers domiciled in their Chinese homeland.

“The growth of hyperscale data centers is pretty much on a straight-line trajectory, with an average of 16 new data centers coming on line every quarter over the last three years,” said John Dinsdale, a chief analyst at Synergy. “The big five US hyperscalers still lead in terms of quarterly data center spending, but the Chinese hyperscalers are growing rapidly with ByteDance being particularly noteworthy. It has come from almost nowhere over the last three years but is now ranked seventh in data center spending, well ahead of many industry giants.”