TikTok's parent company spends $14 billion on Nvidia.

ByteDance plans to spend approximately $14 billion to purchase AI chips from Nvidia by 2026. Photo: Handout .

According to several internal sources, ByteDance is planning to significantly accelerate its investment in hardware infrastructure. Specifically, the projected spending on Nvidia graphics processing units (GPUs) in 2026 is expected to reach $14 billion (approximately 100 billion yuan), a substantial increase from the 85 billion yuan projected for 2025.

According to a report from the Financial Times, the total cost of ByteDance's entire AI infrastructure could reach $23 billion by 2026. This dramatic increase reflects the enormous computing demands as the company not only operates the video recommendation algorithms for TikTok and Douyin, but is also focusing its resources on cloud computing and the "Doubao" AI platform.

ByteDance's Doubao virtual assistant is experiencing rapid growth, processing over 50 trillion tokens per day this month—more than 12 times the 4 trillion tokens processed in December 2024. According to Tan Dai, Chairman of Volcano Engine, the platform has attracted over 100 enterprise clients using more than 1 trillion tokens, solidifying ByteDance's leading position in the domestic AI market.

The focus of ByteDance's acquisition plan is the H200 series chips – Nvidia's latest and most powerful generation of processors for AI training.

Currently, US export control regulations are still tightening restrictions on the sale of high-end chips to China. However, sources indicate that ByteDance expects Nvidia to release a refined version of the H200 to meet the US Department of Commerce's regulatory standards.

ByteDance's plans also depend on whether Nvidia is allowed to supply its H200 line of graphics processors to the Chinese market. Image: created by AI.

Owning this chip will significantly shorten the training time for next-generation AI models, enabling Doubao to compete directly with formidable rivals like ChatGPT and Gemini.

Despite investing heavily in Nvidia, ByteDance remains cautious in implementing a diversified supply chain strategy to ensure technological security against geopolitical risks. The company currently employs over 1,000 people to develop its own chips internally, initially making progress with its own AI processors that are expected to deliver performance comparable to the H20 series but at a more cost-effective price.

Simultaneously, the company is also considering ordering approximately $5.7 billion worth of chips from domestic partner Huawei as a crucial contingency plan in the face of US sanctions. Maintaining these massive orders with Nvidia helps ByteDance maintain its position as a key customer, ensuring priority in the global supply chain while building necessary self-sufficiency.

"ByteDance is in a race against time. They need to accumulate as much computing power as possible before the technological 'doors' close completely," the Financial Times noted.

With this record-breaking budget, TikTok's parent company is proving that in the AI war, whoever possesses more "weapons" (semiconductor chips) will have the opportunity to shape the future of the global internet.

Source: https://znews.vn/cong-ty-me-tiktok-chi-14-ty-usd-cho-nvidia-post1615747.html