The company plans to allocate Rmb160bn ($23bn) in 2026 as part of its cunning plan to keep up with US tech giants in the fast-paced AI race.
Around half of ByteDance's 2026 budget will be spent on acquiring semiconductors to power its AI models. Rmb 85bn (around $12bn) will be directed towards purchasing AI processors, but there’s a catch: ByteDance is still uncertain about its ability to access Nvidia’s top-tier chips, thanks to US export restrictions on Chinese tech companies.
ByteDance plans to purchase 20,000 Nvidia H200 processors, a slightly less advanced chip than Nvidia's flagship hardware. If ByteDance gains access to these chips, its spending could rise even further. While US restrictions continue to hang over the company’s plans, ByteDance remains hopeful, especially after President Donald Trump’s recent decision to allow Nvidia to sell the H200 to “approved customers” in China.
ByteDance's AI ambitions are vast, but it still lags behind US giants like Microsoft, Alphabet, Amazon, and Meta, who collectively spent more than $300bn this year on building out data centres for AI models. Due to export bans, Chinese companies like ByteDance and Alibaba have had to develop more affordable AI models that require less computational power.
However, ByteDance is still making strides in key areas. Its Doubao chatbot has overtaken DeepSeek to become the most popular AI chatbot in China, attracting millions of users. The company is also pushing its Volcano Engine cloud offering, positioning itself as a competitor to Alibaba’s cloud services.
While ByteDance's open-source AI models may not perform as well on independent benchmarks as its local rivals, its consumer-facing AI services are thriving. The company saw a significant increase in daily token usage, reaching more than 30tn daily tokens in October, just under Google’s $43tn for the same period.
Being a private company gives ByteDance an advantage. Unlike its US counterparts, the company isn’t pressured by quarterly earnings reports, allowing it to make bold, long-term investments in AI without worrying about short-term returns.
ByteDance is leasing data centres overseas to access Nvidia’s best hardware, train AI models and serve clients outside of China. Though ByteDance hasn’t commented on its 2026 investment plans, insiders suggest that its AI spending could increase if the company secures broader access to Nvidia’s chips.
In the end, ByteDance is pushing hard to consolidate its position as a leader in the AI space. Despite challenges, the company remains determined to stay competitive and carve out a significant role in the global AI market.
