ByteDance, the Chinese parent company of TikTok, is reportedly set to ramp up its investment in artificial intelligence (AI) to the tune of $23 billion next year amid a broader strategy to keep up with its U.S. competitors.
ByteDance Sets Sights On AI Leadership
ByteDance is planning to increase its capital expenditure in AI infrastructure in 2026. The company has set aside CNY160 billion ($23 billion) for this purpose, a significant increase from the CNY150 billion it invested this year, according to a report by the Financial Times on Tuesday.
About half of the budget will be directed toward purchasing advanced semiconductors to build AI models and applications. Despite continued uncertainty over Chinese companies' access to Nvidia (NASDAQ:NVDA) chips, ByteDance has set aside CNY 85 billion ($12.07 billion) for AI processors next year.
ByteDance, one of China's top AI infrastructure builders, is aiming to establish itself as a global leader in the space. However, its investment levels pale in comparison with those of U.S. tech giants such as Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG) (NASDAQ:GOOG), Amazon.com (NASDAQ:AMZN), and Meta Inc. (NASDAQ:META), which together have poured nearly $400 billion this year into building data centers to power AI models and products.
The company did not immediately respond to Benzinga‘s request for comment.
TikTok US Owners Face Limited Control
This significant investment in AI comes on the heels of a series of strategic moves by ByteDance. Earlier this month, TikTok signed an agreement to create a new U.S.-based joint venture with major American investors, including Oracle Corp. (NYSE:ORCL), Silver Lake, and Emirati investment firm MGX, in a bid to avoid a U.S. ban.
However, a leaked memo revealed that these new U.S. owners may have less control than expected over key business areas. TikTok CEO Shou Chew said new investors will not control key operations such as TikTok Shop or ad sales, though they may share in profits.
He said a new U.S. joint venture based on TikTok's U.S. Data Security unit will operate independently and control data protection, algorithm security, content moderation, and software assurance, while TikTok's global U.S. entities will continue managing global product integration and commercial activities such as e-commerce, advertising, and marketing.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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