Tencent, ByteDance turn to debt to fund AI despite large cash reserves
A TMTPost article, citing foreign media reports, says Tencent launched a US$5 billion offshore bond issue on Oct 13, its second overseas fundraising this year after a nearly US$4.7 billion deal in June, while ByteDance earlier in September closed a US$29.6 billion syndicated loan. It notes both remain cash-rich — Tencent reported Q2 net profit of RMB 56.02 billion and about RMB 200 billion in cash, and ByteDance's first-half revenue was reported at US$120 billion with US$20 billion net profit — yet AI capital spending is heavy: Tencent's Q2 free cash flow was negative RMB 13.8 billion with capex of RMB 52.78 billion, and ByteDance reportedly raised its 2026 capex ceiling to US$70 billion. The piece also cites Alibaba's HK$80 billion share placement in August and a Morgan Stanley estimate that global AI-related debt issuance reached about US$450 billion by September, more than double all of last year.
It suggests AI infrastructure buildouts increasingly rely on long-term debt financing, and that cooling investor appetite could make that funding channel less dependable.