ByteDance, the developer of TikTok and one of the leading forces in artificial intelligence on the planet, is considering increasing its capital expenditure to more than double last year’s figure in a bid to lead the Chinese AI market and challenge major US players abroad.
The Beijing-based social media giant is discussing a spending plan of up to $70 billion this year to expand data centers and other AI infrastructure, according to people familiar with the matter. The company should finance a large part of this amount with the approximately US$50 billion in profits made in 2025, said the sources, who requested anonymity because the financial data is confidential.
The numbers are still preliminary and can be adjusted at least every quarter, so the final figure could be very different, they added. One of the interlocutors stated that this year’s investments could be between 400 billion and 500 billion yuan (US$59 billion to US$74 billion).
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ByteDance is already discussing increasing investments to around US$100 billion in 2027, if the economic and business environment is favorable, the sources said. Last year, the capex of the company would have been around US$25 billion.
ByteDance representatives did not respond to requests for comment.
The company’s strategic discussions revealed the gulf between the US and China in their approach to artificial intelligence. Four American giants — Amazon.com, Alphabet, Microsoft and Meta — have indicated plans for up to US$725 billion in investments this year, mainly in AI data centers and new models, which equates to around US$181 billion on average for each.
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Chinese big techs, such as Tencent and Alibaba, have been much more cautious. Tencent reported capex of 79.2 billion yuan in 2025, while Alibaba reported 126 billion yuan in the fiscal year ending in March.
ByteDance’s plans would represent an aggressive move to consolidate leadership in key segments such as chatbots and video and expand its international presence. The company also benefits from the fact that data center costs in China are much lower, allowing it to build capacity similar to that of American rivals at a relatively lower expense. The company recently reached a deal to buy millions of chips from Qualcomm to support its “agent” AI services, Bloomberg reported this week.
“ByteDance, Tencent and Alibaba are converging on the view that AI infrastructure is now a strategic asset, rather than an optional budget line item,” said Ke Yan, technology analyst at DZT Research in Singapore. “The spending gap between Chinese tech champions and American peers like Microsoft, Amazon and Meta is smaller than the headline numbers suggest, once adjusted for local cost structure — and the gap in terms of raw ambition is smaller still.”
O chatbot Doubao, from ByteDance, is the most popular in China, with more than 300 million monthly users. The company is already preparing to charge a subscription for the service, something still uncommon in a country where users resist paying for online services. The company’s text and video templates — like Seedance — power a range of products, from video editors to coding tools and automated agents. Part of this success comes from Douyin, the Chinese “sister” of TikTok, the ubiquitous short video platform used to promote new products.
Like the largest American groups, ByteDance and its Chinese rivals plan to accelerate investments in the basic infrastructure needed to train and operate AI services — in anticipation of broader consumer adoption as the technology evolves.
“The AI push creates a virtuous circle for ByteDance, and the benefits are very visible,” said Ke.
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ByteDance’s budget far exceeds that of domestic rivals, at least for now. Tencent has promised this year to at least double its investments in AI, to more than 36 billion yuan ($5.3 billion), while Alibaba is working on an ongoing target of more than $50 billion in three years — a figure that executives say should grow significantly.
Owner of TikTok, the company is one of China’s biggest buyers of servers and computing chips in part because it already operates the country’s largest video platform. The spending increase seeks to alleviate the global shortage of processing capacity, amid the boom in AI development. According to the sources, ByteDance will review AI investments quarterly as standard practice. Budgets can be adjusted depending on business needs and hardware and power availability.
O South China Morning Post reported this month that ByteDance increased its AI infrastructure spending plan by 25% to around US$30 billion in 2026, citing anonymous sources.
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It remains unclear how ByteDance — valued at $550 billion in a stake transaction, according to Reuters — intends to finance these investments in the long term. The company has been seen for years as a strong candidate for an IPO, but has shown few signs of rushing. In the last year, it left businesses such as games, raising resources to focus on its core areas of AI and social networks.
© 2026 Bloomberg L.P.
