ByteDance, whose estimated valuation tops $220 billion, has raced to develop its generative AI product Doubao to compete with domestic and international rivals Baidu Inc. and OpenAI’s ChatGPT. The race has grown more fevered, particularly as the space sees other market entrants, such as Nvidia’s budding open source model.

The tech company intern’s dismissal followed widely circulated Chinese social media posts last weekend describing a trainee injecting code and altering parameters into a group of commercial graphics processing unit (GPU) computers, essentially planting a virus in the company’s AI training system and allegedly causing up to $10 million in damages. Other posts allege the employee attended meetings about the impacts of the virus while “pretending to be clueless.” 

ByteDance sacked the intern in August, according to a translated post by the company on its news platform Toutiao. The intern was on the commercial technology team and had no experience at the company’s AI Lab, ByteDance claimed. The company alerted the intern’s university to let it handle disciplinary action.

The Chinese tech giant also denied parts of the swirling rumors around the firing, saying the loss of tens of millions or dollars and the involvement of 8,000 GPU cards was “seriously exaggerated.” The company also said the intern’s actions did not impact its online business, commercial projects, or ByteDance’s large models.

ByteDance did not respond to Fortune’s request for comment.

The AI chatbot race

ByteDance may have a stronghold over video streaming with TikTok, but its path to AI primacy hasn’t been as clear cut. It has been racing to catch up with Big Tech’s efforts to produce an AI chatbot after CEO Liang Rubo implied during a company-wide meeting in January that ByteDance was late to the game in developing generative AI and had fallen behind ChatGPT and Baidu Inc. He pushed for a sense of urgency in developing its own gen AI.

“We are not sensitive enough to external changes,” Liang said, per the company’s official WeChat account. “During our semi-annual technical review, discussions related to GPT did not emerge until 2023, despite GPT-1 being released in 2018.”

ByteDance quietly released its chatbot Doubao last year, reportedly using tech from ChatGPT, according to the Verge. A faux pas in the industry, borrowing other models could be seen as a scrappy act of desperation, sources told the outlet. A ByteDance spokesperson responded to those claims, saying the company was licensed and permitted to use ChatGPT’s application programming interface. He also said ByteDance used ChatGPT in its model’s early development for annotating purposes and later removed it.

But ByteDance’s unconventional development strategy may have paid off. In May, the company replaced Baidu as China’s most popular AI chatbot. According to an August report by financial services company Unique Capital, the download rate of Doubao—as well as ByteDance’s video-editing app CapCut—outpaced that of ChatGPT in July.

The tech company’s next test in its AI investment will be the success of wearable AI earbuds called Ola Friend, launched last week as an audio assistant able to provide access to Doubao without needing to connect with a user’s smartphone. The product, available only in China, retails for $170.

Recommended newsletter
Data Sheet: Stay on top of the business of tech with thoughtful analysis on the industry's biggest names.
Sign up here.