The TikTok logo is displayed on a smartphone with owner ByteDance's name in the background. Investors are keen on ByteDance's AI potential.Jonathan Raa/NurPhoto via Getty ImagesByteDance cofounder Zhang Yiming has become Chinas richest man as investors bet on companies with AI potential. Zhangs fortune has grown to $65.5 billion, ahead of beverage giant Nongfu Spring founder Zhong Shanshans $56.5 billion, according to Forbes estimates.Zhang, 41, derives his net worth from a 21% stake in the privately held tech behemoth, although he stepped down as chairman in 2021 after resigning as chief executive earlier that year.In secondary markets, ByteDances valuation varies from $240 billion to over $400 billion, which is what some of its major investors including Fidelity Investments and T. Rowe Price Group believe the TikTok parent to be worth. Forbes thinks the company has a valuation of $312 billion, based on a recent share buyback program as well as conversations with analysts and a separate ByteDance investor who prefers not to be named.That amount marks a more-than-40% jump from 2024, when certain private market investors were only willing to acquire ByteDance shares at a price that would suggest a $217 billion valuation. The company got a tailwind from the seemingly improving TikTok situation in the U.S., after President Donald Trump said he would probably extend the April 5 deadline for the popular short video platform to be sold or banned, Glen Anderson, cofounder and CEO of U.S.-based broker-dealer Rainmaker Securities, says by email.Trump said on Sunday that he was negotiating with different U.S. buyers for a stake in TikTok, and a deal might come soon.In the meantime, investors have grown optimistic about the outlook for the countrys large technology companies, including ByteDance. They are encouraged by the governments friendlier stance toward private-sector businesses and the countrys AI advances despite U.S. attempts to thwart them with export controls. The Hang Seng Tech Index, which tracks the performance of such companies as Alibaba and Tencent, soared 80% over the past 12 months.All China tech assets staged a big rebound off the low base, Charlie Chai, a Shanghai-based analyst at research firm 86Research, says by WeChat.For its part, ByteDance has seen its Doubao chatbot become the worlds second most popular AI chatbot by monthly active users (MAUs).Powered by its own large language model (LLM), the free product had 82 million MAUs in February. OpenAIs ChatGPT, which was No.1, had 400 million in the same month, according to aicpb.com, a Hunan-based website that tracks AI products. The chatbot from Chinese AI company DeepSeek, which shocked Silicon Valley with its January release of a highly cost-effective model, ranked No. 4 with 62 million MAUs.A ByteDance spokesperson declined to comment. Although no longer involved in the companys day-to-day operations, Zhang still plays a key role in its AI strategy, according to media reports.The reclusive billionaire has encouraged an intense focus on AI, with the ultimate goal of realizing artificial general intelligence (AGI), or AI that matches or surpasses human intelligence, according to state-affiliated news outlet The Paper. He spearheads ByteDances hiring of AI-related talents, The Paper reported. Zhang reportedly agreed to an over 10 million yuan ($1.4 million) annual salary to poach a top AI engineer from a rival, according to local media reports.ByteDance also set aside 40 billion yuan ($5.5 billion) for the purchase of AI chips in China in 2025 and $6.8 billion for investing in AI-related infrastructure overseas, according to a Financial Times report that cited anonymous sources. Last year, the company spent $8 billion on AI-related servers, hardware that supports the computing needs of AI, according to a March research report by Beijing-based brokerage Cinda Securities.But 86Researchs Chai cautions that competition in AI is getting increasingly cut-throat in China. ByteDance operates multiple popular social media platforms, including TikToks sister app Douyin, which has helped the company promote its Doubao chatbot. But when it comes to the AI models that power such services, it is Chinese e-commerce giant Alibaba that is leading the competition, Chai says. Last week, Alibaba released its latest AI model, the QwQ-32B, which boasted improved performance and reasoning capabilities and doesnt require as much data to train, according to the company.Another model from the Chinese e-commerce giant Qwen2.5-Max is the worlds ninth most popular AI model by user vote, according to Chatbot Arena, a ranking platform developed by researchers including from the University of California, Berkeley. Privately held DeepSeeks R1 model ranks No. 6, according to Chatbot Arena. ByteDances products arent in the top ten.While chatbots provide a convenient consumer-facing interface for showcasing the power of AI to the public, what truly matters is the back-end models, which should be evaluated more rigorously in terms of performance and costs, Chai says by WeChat. Alibabas is the research firms top pick by those criteria, he says.