ByteDance's Net Profit Plunges Over 70% in 2026 Amid Surge in AI Spending, Report Says
ByteDance Ltd.'s net profit declined by more than 70% in 2026 as the company significantly ramped up investment in artificial intelligence operations, according to people familiar with the matter cited by a Chinese financial publication.
According to Securities Times' report published recently, the sharp drop in profitability came as the TikTok parent company substantially increased its AI business spending during the third and fourth quarters of last year. The profit margin also fell considerably during the period, the people said.
Despite the profit decline, ByteDance saw its overseas revenue surge nearly 50% in 2026, far outpacing the approximately 20% growth in its domestic Chinese market, the sources revealed. As a result, the company's international business accounted for more than 30% of total revenue, up from 25% in 2025, marking a record high.
TikTok Shop, the e-commerce platform integrated into the popular short-video app, emerged as the primary driver behind the overseas revenue growth. The platform's gross merchandise value (GMV) jumped nearly 70% year-over-year in 2026, demonstrating strong momentum in ByteDance's global commerce expansion.
ByteDance declined to comment on the figures when approached for verification.
The financial performance reflects ByteDance's strategic shift toward AI technology amid intensifying competition in the sector. The company has been investing heavily in developing large language models and AI-powered features across its product portfolio, including content recommendation systems and creative tools.
The development suggests ByteDance is prioritizing long-term technological advancement over short-term profitability, a strategy that could reshape its competitive position in both the social media and AI landscapes in the coming years.
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