Bytedance's first-half revenue surpasses expectations, AI investments drag on profit margins

ByteDance reported a 30% increase in revenue for the first half of 2026 compared to the same period in 2025. However, its net profit margin fell to 16.7%, continuing a decline that began in 2023, when it was 26%, and 21% in 2024. The company has not commented on the figures. The decline is attributed to increased investment in artificial intelligence, including the development of its own large language model and video model, as well as expansion into AI cloud services. Overseas operations have become a key growth driver, with TikTok's international revenue now exceeding 30% of total revenue, a new high. This marks a shift from 2024, when overseas revenue accounted for 25% of total revenue. In 2025, overseas revenue grew by nearly 50%, outpacing domestic growth of around 20%. To fund its AI initiatives, ByteDance recently secured a $30 billion loan, the largest in its history. Competitors like Alibaba and Zhipu AI are also raising significant capital for AI development.