ByteDance plans to increase AI capital expenditure to $70 billion this year, potentially breaking $100 billion next year

ByteDance is brewing an unprecedented investment in AI infrastructure.

According to Bloomberg, ByteDance's capital expenditure discussions for this year range up to $70 billion (approximately 400-500 billion yuan), mainly aimed at data centers and AI infrastructure construction. The funding relies to a significant extent on its profits of about $50 billion in 2025. If economic and business conditions are favorable, next year's capital expenditure could further increase to about $100 billion. In contrast, ByteDance's capital expenditure last year was around $25 billion.

It is worth noting that the mentioned figures are still in the preliminary discussion phase and may be adjusted quarterly, with the final actual expenditure possibly greatly differing from the plan.

From the competitive landscape perspective, the combined capital expenditure plans of the four major U.S. hyperscale cloud providers—Amazon, Alphabet, Microsoft, and Meta—this year reach a staggering $725 billion, averaging about $181 billion per company. ByteDance's scale of $70 billion still lags, but Ke Yan, a technology analyst at DZT Research based in Singapore, points out that considering the much lower construction costs of data centers in China compared to the United States, ByteDance might be able to build equivalent computing power at a lower cost, "The spending gap between Chinese and American tech giants on AI infrastructure, after adjustment for local cost structures, is actually much narrower than the apparent figures."

Among domestic competitors, ByteDance's investment effort is significantly more aggressive. Tencent has committed to at least double its AI investment this year to over 36 billion yuan, while Alibaba maintains a rolling target of $50 billion over three years.

On the business front, ByteDance's DouBao has become the most popular AI chat product in China, with monthly active users exceeding 300 million, and the company is preparing to introduce a subscription-based charging model. Its underlying text and video models (such as Seedance) have been widely applied in a variety of products, including video editing, code tools, and automated intelligent agents. This week, ByteDance also reached an agreement with Qualcomm to purchase millions of chips to support its intelligent agent AI services.

With a current valuation of about $550 billion, ByteDance has long been seen as a hot IPO candidate, but there has been no clear move towards going public to date. Over the past year, the company has gradually exited non-core businesses such as gaming, focusing resources on AI and social media as its main business areas.