ByteDance H1 Net Profit Drops to $20 Billion Amid Higher AI Spending

ByteDance's net profit fell to $20 billion in the first half of 2026, a single-digit percentage decline year over year, as the company increased spending on AI, according to The Information, citing three people familiar with its financials.

Revenue in the period reached $120 billion, up about 30% year over year, partly driven by strong growth in TikTok's international advertising and e-commerce businesses. In 2025, ByteDance's revenue grew 29% to about $200 billion, while net profit rose 27% to $42 billion, the report said.

The profit decline highlights the cost pressure from AI investments at China's largest technology company by revenue. ByteDance has been expanding its AI cloud business, offering model services to enterprise customers, while its Seedance video-generation model has become a leading player in the global AI video market. Beyond acquiring advanced chips, the company is developing its own inference chips for running AI models. It recently borrowed about $30 billion from banks, its largest-ever single loan, which could support expanding AI spending.

One person familiar with the matter said ByteDance hopes to leverage the momentum of Seedance to bring more revenue to its AI and cloud businesses.