ByteDance said to invest $22.8b in AI in 2026

ByteDance, the Beijing-based owner of TikTok, plans to raise its capital expenditure on AI to RMB 160 billion (US$22.8 billion) in 2026, according to people familiar with the matter.

The company reportedly spent RMB 150 billion (US$21.33 billion) on AI infrastructure this year, with about half of next year’s budget allocated for advanced semiconductors.

ByteDance is among China’s largest builders of AI infrastructure, but still spends far less than US tech giants, which together invested over US$300 billion in related data centers this year.

US export controls continue to limit Chinese firms’ access to Nvidia’s top AI chips, pushing ByteDance and others to develop models that require less computing power.

ByteDance is planning a test order of 20,000 Nvidia H200 processors if US restrictions permit, and continues to rent overseas data centers to access advanced hardware for training AI models.

🔗 Source: Financial Times

🧠 Food for thought

Implications, context, and why it matters.

ByteDance’s RMB 160B bet assumes it can secure advanced chips despite tightening U.S. export controls

The RMB 160B plan depends on restricted semiconductors as half targets advanced chips while U.S. rules limit access to Nvidia’s top H100 1.
ByteDance has Nvidia A100 and H100 chips 2. It also holds A800 and H800 plus Huawei Ascend 910B processors 2. Chinese firms ordered 1.3 million Nvidia H20 inference chips (data center processors optimized for running AI models) worth $16B 1.
A test order for 20,000 H200 processors (Nvidia’s latest AI accelerator) hinges on U.S. clearance, which keeps deployment plans uncertain.
A Broadcom tie-up on a 5nm ASIC that meets export rules gives a fallback 2. TSMC will not start production in 2024 2, so arrival will slip.

Chinese AI infrastructure vendors face surging demand for high-density power and liquid cooling systems

Cooling needs extend past air systems as Huawei Ascend 910B draws 310 watts with racks at 15 to 30 kW 3.
China’s liquid-cooled server market hit $2.37B in 2024 with 67% growth, and it could reach $16.2B by 2029 3.
Cold plate solutions hold 95% share in China 3. Immersion cooling can cut energy use by 50% versus air 4, which positions specialists for ByteDance partnerships with hyperscalers (very large-scale cloud and internet companies operating massive data centers).
Equipment providers face headwinds from 3M ending fluoropolymers, fluorinated fluids, and PFAS (per- and polyfluoroalkyl substances) additives by 2025 3. New supply chains are needed. That opens room for domestic Chinese coolant makers.