ByteDance, TikTok’s Chinese parent company, is set to significantly ramp up its investment in AI next year, as access to Nvidia’s chips once again becomes a key fault line in the global race.
ByteDance is reportedly targeting around RMB160bn (£17bn) in capital expenditure in 2026, up from roughly RMB150bn (£15.7bn) this year, with the bulk of the increase directed towards AI infrastructure.
Around half of that spending is expected to go on advanced semiconductors used to train and run AI models across its apps, ad tools and cloud services.
The move proves how AI is rapidly becoming core infrastructure for consumer platforms like TikTok, as companies race to embed generative tools into search, content creation and advertising, areas directly tied to revenue growth.
ByteDance has budgeted roughly RMB85bn (£8.9bn) for AI processors next year, even as uncertainty persists over Chinese firms’ access to Nvidia’s most advanced chips under US export controls.
Chips and profit
The social media platform is understood to be planning a trial purchase of around 20,000 Nvidia H200 processors, a less powerful alternative to the company’s latest hardware, following Donald Trump’s decision this month to allow limited sales to “approved customers” in China.
If access to the H200 broadens, people close to the plans say ByteDance could further lift its AI spending for 2026.
Despite the scale of the investment, ByteDance still trails its US rivals by some distance.
Microsoft, Alphabet, Amazon and Meta have together spent more than $300bn this year alone building the data centres to power their AI models and products.
Export restrictions have forced Chinese groups such as ByteDance and Alibaba to prioritise efficiency, developing models that require less computing power and are cheaper to deploy.
But that constraint has not held ByteDance back on the consumer side.
Its so-called ‘Doubao’ chatbot has overtaken DeepSeek to become China’s most popular AI assistant by monthly users and downloads, according to QuestMobile.
Goldman Sachs analysts say ByteDance’s AI services are now the most used in China, with daily token consumption exceeding 30 trillion in October, compared with Google’s 43 trillion.
The company is also pushing its Volcano Engine cloud platform to businesses, putting it in more direct competition with Alibaba’s cloud division.
What’s more, ByteDance’s private ownership is seen as a strategic advantage, as not being a public company gives the firm more freedom to invest aggressively and absorb short-term costs while building long-term AI plans.
Alongside billions spent on leasing overseas data centres to gain legal access to Nvidia’s most advanced hardware, ByteDance is increasingly positioning AI as the engine behind both its consumer products and its future revenue streams.
The company declined to comment.