ByteDance Plans Massive AI Chip Spending Boost as Nvidia Demand Grows in China

China’s technology giant ByteDance is preparing to significantly ramp up its artificial intelligence investment, with plans to spend about 100 billion yuan (approximately $14 billion) on AI chips in 2026, according to a report by the South China Morning Post citing people familiar with the matter. A large portion of this budget is expected to be allocated to purchases from Nvidia (NASDAQ: NVDA), highlighting the growing importance of advanced AI hardware in powering next-generation digital platforms.

The reported spending marks a notable increase from an estimated 85 billion yuan in 2025. However, the plan is partly contingent on whether Nvidia is permitted to continue selling its H200 graphics processing units to Chinese customers amid ongoing U.S. export restrictions. If approved, the H200 GPUs would play a critical role in supporting ByteDance’s rapidly expanding AI infrastructure.

ByteDance, the Beijing-based owner of TikTok and Douyin, is accelerating AI investment as computing demand surges across its ecosystem. This includes its core social media platforms, cloud computing services, and the development of large language models that underpin recommendation systems, content creation tools, and advertising technologies. As user engagement and data processing needs grow, so does the company’s reliance on high-performance AI chips.

In parallel with external procurement, ByteDance has been strengthening its internal semiconductor capabilities. The company has reportedly built an in-house chip design team of around 1,000 employees. This unit has made progress in developing a processor with performance comparable to Nvidia’s China-specific H20 chip, but at a lower cost. Such efforts signal ByteDance’s long-term strategy to reduce dependence on foreign suppliers while maintaining competitive AI performance.

Beyond processors, ByteDance is also investing heavily in memory technologies, including high-bandwidth memory, which is essential for training and running advanced AI models efficiently. Overall, the company is expected to lift its total AI-related investment to around 160 billion yuan in 2026, underscoring its ambition to remain at the forefront of artificial intelligence innovation in China’s highly competitive tech landscape.