ByteDance's Bold $23B AI Vision: A Game Changer for 2026
ByteDance, the parent company of TikTok, is preparing to invest approximately $23 billion in artificial intelligence infrastructure next year as Chinese tech giants race to narrow the gap with their American counterparts, despite ongoing restrictions on access to advanced semiconductors.
The Beijing-based company has outlined preliminary plans for capital expenditures of 160 billion yuan (roughly $23 billion) in 2026, an increase from the 150 billion yuan allocated this year, according to the Financial Times. About half of the planned budget—approximately 85 billion yuan—will focus on acquiring advanced AI processors.
Competition Intensifies Amid Chip Restrictions
The spending push underscores the widening investment gap between Chinese and American technology companies. Collectively, Microsoft, Alphabet, Amazon, and Meta are expected to spend between $350 billion and $400 billion on AI infrastructure in 2025, dwarfing ByteDance's plans.
U.S. export restrictions have prevented Chinese firms from purchasing Nvidia's most advanced chips, forcing companies to develop more efficient AI models that require less computational power. However, a recent policy shift may provide relief. President Donald Trump announced in early December that the U.S. would permit Nvidia to export its H200 processor—a less advanced chip than its top-tier products—to approved customers in China. NVIDIA aims to begin H200 shipments to China by mid-February, with initial deliveries ranging from 40,000 to 80,000 chips.
ByteDance is reportedly looking to acquire 20,000 H200 units in an initial order, with each unit estimated to cost around $20,000.
Doubao Leads China's AI Market
Despite hardware constraints, ByteDance has emerged as a leader in consumer-facing AI applications. Its Doubao chatbot became China's most popular AI assistant with 157 million monthly active users in August, surpassing competitors like DeepSeek, according to analytics firm QuestMobile. More recent data shows Doubao reached 159 million monthly active users by October.
The app's success stems from ByteDance's expertise in creating viral mobile applications and its tight integration with Douyin, TikTok's Chinese counterpart. ByteDance's daily token usage—a measure of AI service engagement—exceeded 30 trillion in October and reached 50 trillion tokens in December, approaching Google's 43 trillion, according to Goldman Sachs and ByteDance executives.
"In contrast to other major Chinese tech companies like Alibaba and Tencent, ByteDance benefits from being a private entity, which grants it greater flexibility to invest boldly and adopt a long-term approach in AI," a ByteDance investor told the Financial Times.
