Reuters reported that, according to sources familiar with the matter, half of this budget will be directed toward overseas AI infrastructure such as data centers and networking equipment. Major beneficiaries include Huawei Technologies, Cambricon Technologies, and US-based Nvidia.
The spending highlights ByteDance’s ambition to maintain its AI leadership domestically while bolstering its international capabilities. ByteDance currently operates over 15 standalone AI applications, surpassing competitors like Baidu and Tencent, with its top-performing chatbot Doubao leading the charge in China.
Internationally, ByteDance is scaling its AI offerings, including apps like Doubao’s global version, Cici, and AI-powered tools like the text-to-video generator Dreamina and the image generator Xinghui. The company is also enhancing its custom chatbot platform Kouzi and emotional support app Maoxiang, among other innovations.
The huge investment comes as ByteDance faces geopolitical challenges, particularly concerning TikTok’s uncertain future in the US. Earlier this week, President Donald Trump signed an executive order delaying a potential ban on TikTok for 75 days, adding urgency to ByteDance’s global strategy.
ByteDance’s AI expansion includes significant purchases of Nvidia’s H20 AI chips tailored for Chinese markets amid U.S export restrictions. ByteDance is Nvidia’s largest customer in China and Microsoft’s biggest client in Asia for cloud-based Nvidia chips, reinforcing its AI capabilities both domestically and abroad.
Although ByteDance’s spending is considerable, it remains modest compared to US tech giants. Google’s parent company, Alphabet, budgeted US$50 billion for chips and data centers in 2024, while Microsoft allocated US$55.7 billion during its fiscal year ending June 2024, with a substantial portion dedicated to AI.