Summary
ByteDance plans to lift AI investment sharply in 2026, sources say.
Preliminary capex budget is around Rmb160bn ($23bn), up from 2025.
About half of spending is earmarked for advanced semiconductors.
AI chip access remains uncertain due to US export controls.
Move highlights intensifying AI competition between China and the US.
TikTok owner ByteDance is planning a significant increase in artificial-intelligence spending in 2026, underscoring the urgency among Chinese technology groups to keep pace with US rivals amid tightening geopolitical and technology constraints.
According to people familiar with the matter, the Beijing-based company has preliminarily budgeted around Rmb160bn ($23bn) in capital expenditure for 2026, up from roughly Rmb150bn this year. Around half of the planned spending is expected to be directed toward advanced semiconductors, with approximately Rmb85bn earmarked specifically for AI processors.
The proposed increase highlights ByteDance’s determination to scale its AI capabilities across content recommendation, advertising, and generative AI applications, even as access to cutting-edge chips remains uncertain. US export controls have limited Chinese companies’ ability to procure the most advanced processors from firms such as Nvidia, forcing companies to balance stockpiling, alternative sourcing and in-house optimisation.
ByteDance has emerged as one of China’s most aggressive investors in AI infrastructure, reflecting the strategic importance of machine learning to its core businesses, including TikTok and its Chinese counterpart Douyin. AI plays a central role in recommendation algorithms, content moderation and advertising efficiency, making compute capacity a critical competitive input.
The spending plans also illustrate the broader shift underway among China’s largest internet companies, which are prioritising long-term technological self-sufficiency over short-term margin preservation. As US technology firms ramp up AI investment at an unprecedented pace, Chinese groups are under pressure to respond despite regulatory and supply-chain headwinds.
While the budget remains preliminary and subject to change, the scale of the proposed outlay suggests ByteDance is preparing for sustained competition in AI over the coming years. For markets, the plans reinforce expectations that AI-related capital expenditure will remain elevated globally, even as access to advanced hardware becomes increasingly fragmented along geopolitical lines.
