ByteDance grabs one-fifth of China’s data centre capacity as AI drives infrastructure boom

A new study by research firm SemiAnalysis reveals that the TikTok parent company ByteDance holds around one-fifth of China's data centre capacity, positioning the firm as the country's largest tenant and a key catalyst for its AI development. The analysis, which examined over 1,000 facilities operated by 60+ companies, found that ByteDance generally leases its entire data centre footprint.

Key AI offerings by ByteDance include Doubao, a popular assistant with hundreds of millions of users, and Seedance, a video generation model.

While ByteDance's private financials remain undisclosed, competitors such as Alibaba Group Holding, Tencent Holdings, and Baidu collectively invested $20 billion in capital expenditures during the second quarter, a more than double increase compared to the previous year. All three listed companies reported negative free cash flow for the first time on record in the same quarter.

According to SemiAnalysis, China's data centre capacity stands at over 24 gigawatts (GW), with an additional 20GW in development and another 30GW in announced projects. The U.S. is projected to have 56GW of capacity by the end of 2026, while the rest of the Asia-Pacific region and Europe, Middle East, and Africa will have 15GW and 14GW, respectively.

The surge in infrastructure development is occurring alongside high vacancy rates in older facilities. The report attributes this discrepancy partly to the industry's origins in telecoms – China's three state-owned carriers collectively own about a third of the national data centre capacity, built to lease small numbers of low-power racks to individual clients and unable to handle the power requirements of AI servers. Newer facilities leased in bulk to cloud and AI companies are filling up more quickly.

The availability of chips also presents a constraint. According to Goldman Sachs, Chinese customers' pace of occupying new data centre space has been slower than anticipated in the first half of 2026, likely due to tight supplies of both domestic and imported chips. The bank noted that China added 595 exaflops (eflops) of intelligent computing power during the first half, below the 802 eflops added in the second half of 2025.

The increase brought China's total intelligent computing capacity to 2,185 eflops by the end of June, a 177% rise from the previous year, according to the Ministry of Industry and Information Technology. Goldman estimated the first-half increase to be equivalent to about 0.7GW of AI-related data centre capacity being occupied. Despite this growth, the bank still expects China's overall data centre demand to expand at a compound annual rate of 20% from 2025 to 2028.