ByteDance will reportedly invest $12B in AI chips this year alone

ByteDance’s reported $12 billion AI infrastructure investment plan for 2025 marks a significant strategic move for the TikTok parent company, despite facing ongoing regulatory challenges in the United States.

Key investment details: The Financial Times reports ByteDance plans to allocate substantial resources to both domestic and international AI chip procurement and development.

• The company reportedly aims to spend 40 billion yuan ($5.50 billion) on AI chips within China
• An additional $6.8 billion is planned for overseas investment, primarily focusing on foundation model training using advanced Nvidia chips
• ByteDance has officially disputed these figures, stating the “anonymously sourced information about our plan is incorrect”

Domestic supply chain strategy: Chinese semiconductor suppliers are expected to play a crucial role in ByteDance’s AI infrastructure development.

• Approximately 60% of ByteDance’s domestic chip orders would reportedly go to Chinese suppliers, including Huawei and Cambricon
• The remaining domestic purchases would consist of modified Nvidia chips that comply with U.S. export restrictions
• Beijing has reportedly provided informal guidance to tech companies to source at least 30% of their chips from domestic suppliers

Regulatory context: The investment plans emerge amid ongoing regulatory pressures in the United States.

• President Donald Trump recently signed an order delaying a TikTok ban that was originally set for January 19
• The company continues to face pressure from Washington regarding potential forced sale of its TikTok operations in the United States
• Major industry players, including Nvidia, have declined to comment on the reported investment plans

Looking ahead: While ByteDance’s official denial of the reported investment figures creates some uncertainty, the scale of the proposed AI infrastructure spending reflects the growing importance of AI capabilities in the social media and content delivery landscape, particularly as Chinese tech companies seek to reduce dependence on U.S. technology amid ongoing geopolitical tensions.