ByteDance will be spending about 100 billion yuan in artificial intelligence chips from Nvidia in 2026, a significant increase from roughly 85 billion yuan in 2025, if the US company is allowed to sell its H200 graphic processing units in China, the South China Morning Post reported.
The budget–which is subject to change–is part of the Beijing-based company’s ambitious capital spending plan in AI for 2026. ByteDance, which has a private market capitalization of US$500 billion, has built up a chip design unit that employed around 1,000 staff, according to people with knowledge of the situation.
ByteDance’s internal chip unit has made progress in the tape-out of a processor that matches the performance of Nvidia’s H20 chip, a China-tailored chip, but at a lower cost. It has also been reportedly investing in memory technologies such as high-bandwidth memory, pursuing a mix of in-house development and stakes in related start-ups.
READ: ByteDance eyes $330 billion valuation amid uncertainty over TikTok in US (
ByteDance has seen a rise in its computing needs, across its portfolio of globally popular apps, its growing cloud business Volcano Engine and its large language models. Volcano will be serving as the exclusive AI cloud partner for China Central Television’s Spring Festival Gala, the country’s most-watched television broadcast.
ByteDance’s chatbot Doubao processed more than 50 trillion tokens daily this month, up from 4 trillion in December 2024. Volcano Engine had more than 100 corporate clients that had used more than 1 trillion tokens to date, its president Tan Dai recently said. The chip arm also reportedly worked closely with Seed, ByteDance’s frontier AI research team.
ByteDance was preparing to lift overall AI investment sharply to 160 billion yuan in 2026, according to a report by the Financial Times.
READ: Alibaba bets on AI chatbots to catch up with ByteDance, Tencent (
Nvidia is hoping to ship its newly approved H200 chips to Chinese customers before the Lunar New Year holiday in mid-February, according to Reuters. ByteDance and Alibaba have inquired with Nvidia about purchasing powerful H200 AI chips, following the announcement that exports to China are possible once again. However, the delivery remains uncertain as Beijing is yet to approve any purchases. In fact, Beijing recently banned government-funded data centers and Chinese tech companies from purchasing Nvidia’s AI chips, impacting Nvidia’s market share in China.
According to SCMP, Beijing has sought to strike a balance between accelerating the development of AI and promoting the adoption of domestic chips, including products from Cambricon Technologies, Huawei Technologies’ Ascend unit, Moore Threads Technology and MetaX Integrated Circuits.