On one side is MaaS growth running at 10x speed. On the other is a computing power bill that refuses to come down. ByteDance’s AI business is running into the kind of problem companies usually want, until the costs start to bite.

From June 23 to 24, the “2026 Volcano Engine FORCE Conference” was held in Beijing. The venue was packed, and the atmosphere was unusually heated. At the event, ByteDance CEO Liang Rubo delivered a video speech, saying the company’s keyword this year had become “climbing new heights,” and that “climbing the peak of AI” is now its most important task.

“Over the past few years, we have been narrowing the breadth of our business and focusing our energy on AI, and within AI, on improving model capabilities. Volcano MaaS is becoming a foundational business for ByteDance, and our investment will be long-term and firm.”

Volcano Engine President Tan Dai disclosed detailed figures for Volcano MaaS. As of June this year, daily average token calls for the Doubao large model had exceeded 180 trillion, up more than tenfold over the past year.

Volcano is also far ahead in MaaS market share, with a 49.5% token share. In other words, for every two tokens consumed by Chinese enterprises, one is supplied by Volcano Engine. Volcano Engine’s “trillion-token club” has also expanded from 100 customers in December 2025 to 200.

On the model side, ByteDance announced two major upgrades. The first is Doubao large model 2.1 Pro, with a focus on improving coding and office productivity capabilities. The second is Seedance 2.5, scheduled for release in early July, which can generate single video clips of up to 30 seconds, support joint input from as many as 50 full-modal materials, and offer more flexible and controllable video editing.

But rapid model growth and surging user numbers are also creating serious challenges for ByteDance’s computing power supply and model monetization.

##

ByteDance’s Costly Effort to Feed Doubao

According to LatePost, Doubao reached 200 million DAUs in the first half of the year, but generated less than 1 million yuan in daily revenue while consuming tens of millions of yuan a day in application costs. On data center construction, ByteDance plans to raise its 2026 capital expenditure to more than 200 billion yuan, equivalent to 60% of its 2025 profit.

Separately, 36Kr reported that Volcano has raised its MaaS revenue target for this year to 15 billion yuan, about 10 times the 2025 level. But this wave of MaaS revenue growth at Volcano is mainly due to the breakout of Seedance 2.0, which can contribute more than 1 billion yuan in monthly revenue. China Entrepreneur has learned that in the first half of the year, agency fees for Seedance 2.0 had already risen above 10 million yuan, yet supply still fell short of demand.

Seedance’s rapid emergence as Volcano’s cash cow is encouraging, but it is hard to call this a reassuring revenue structure.

In an interview with China Entrepreneur and other media, Tan Dai said: “The Seedance revenue figures circulating outside are all wrong, and they are too high. I’m under a lot of pressure. Finance asks me every day whether I’m hiding numbers.” He also disclosed that the 180 trillion daily average token calls include internal and external usage, as well as the Doubao app itself.

Photo: Yan Junwen

As for computing power pressure, Tan said bluntly that it is not Volcano’s main focus at the moment. “From Volcano Engine’s perspective, we have not assessed the computing power ledger. We mainly focus on the to-B business.”

But what is clear is that it is becoming increasingly difficult for ByteDance to keep Doubao supplied.

The founder of an AI infrastructure company analyzed the profit distribution across the token supply chain for China Entrepreneur: upstream hardware makers such as GPU vendors take at least 60% of the gains; midstream cloud and AI infrastructure companies then sell tokens with gross margins of more than 50%; downstream agents and application developers have almost no profit left. “If Doubao keeps this kind of user growth, computing power consumption could drain ByteDance dry.”

Under pressure, Doubao still launched Doubao Pro on June 24 despite criticism from many users. The standard package costs 68 yuan per month on a recurring subscription, the enhanced package costs 200 yuan per month, and the premium package costs 500 yuan per month.

Volcano is also quietly tightening customer discounts. An AI plush toy maker working with Volcano Engine told China Entrepreneur that in 2025, Volcano charged no large-model API fees. This year, however, Volcano began charging it 6 yuan per device per year for calls, prompting the company to prepay 10 million yuan into its Volcano Engine account.

Xing Xiaoci, head of large-model smart hardware at Volcano Engine, disclosed that as of June this year, the number of AIoT hardware devices connected to Doubao, excluding phones and cars, had surpassed 10 million.

##

Seedance Is Eating Into Bilibili and iQIYI’s Turf

In just a few months, Seedance’s sudden rise has already triggered anxiety and alarm among video companies.

China Entrepreneur has learned that the founder of a leading AI video startup recently called an emergency senior management meeting to calm the team, saying they should not be intimidated by ByteDance’s offensive and that no company has an absolute lead in model progress, with everyone chasing one another. The company also urgently followed up with a large financing round to reassure both its team and its customers.

But with Seedance, ByteDance is still moving aggressively into the territory of iQIYI and Bilibili. The coming Seedance 2.5 model series will support longer video generation and production-grade content creation, and may pose a bigger challenge to theatrical film companies.

Zhang Tianjie, head of large-model solutions at Volcano Engine, said Seedance’s strong consistency solves the low efficiency and high cost of short-video card-drawing and splicing. “Once users try Seedance, it is hard for them to ‘roll back’ to the previous era.”

He also mentioned the market for “film and television secondary creation,” which is also Bilibili’s home turf. Zhang believes that combining secondary creation with IP will open a broad market, potentially larger than today’s token-based model business.

On June 23, Volcano Engine released the Volcano AI Copyright Commercialization Platform. In partnership with director Stephen Chow, users can carry out secondary creation based on officially authorized templates for three classic film IPs, King of Comedy, The God of Cookery, and CJ7, on Douyin, Jimeng, and Jianying.

Volcano Engine is also working on copyright issues around major IP and celebrity AI development. In April, iQIYI announced that more than 100 celebrities had joined its AI artist library, but the move drew backlash from many performers, who refused to authorize their likenesses.

A Volcano Engine employee told China Entrepreneur that Seedance will open cooperation through a commission-based model. Partnerships will be divided into public authorization and project authorization. Public authorization means users can use celebrity faces as long as they pay.

Seedance 2.5 will also add a “3D white-box previs” feature. In science fiction films and large-scale scene production, 3D white-box previs can help teams determine space, camera positions, blocking, and motion in advance, giving creators more precise control over the video generation process.

China Entrepreneur observed that Volcano Engine is integrating the capabilities of products such as Douyin, Soda Music, and Hongguo Short Drama into its product lines. For example, the scriptwriting agent in the IP asset library involves the Douyin platform team, while Soda Music participates in AI content production.

At present, all of the top 20 companies in the AI animated short drama market have connected to Volcano Engine’s AI solutions, covering workflows such as IP asset libraries, AI content production, rendered content production, post-production editing, and ad platform delivery.

Seedance 2.5 will also be used in industrial deployment scenarios, such as synthesizing training data for embodied intelligence to reduce collection costs and accelerate model iteration, as well as generating data for autonomous driving scenarios involving extreme weather and rare road conditions to fill training blind spots. “When a video generation model crosses the production-grade inflection point, its understanding of the physical world becomes an important foundation for world models,” Tan Dai said.

##

Coding and Office Productivity Are Crowded Markets

While ByteDance is trying to quickly raise Seedance’s revenue potential, it has also accelerated the commercialization of Doubao. Recently, Doubao has rolled out features such as pre-purchase questions, group buying, and ride-hailing, but the results appear to have fallen short of expectations.

On June 24, Doubao officially launched its Pro version based on the Doubao 2.1 series of large models. The Pro version targets complex office and productivity scenarios, supports operating a local computer, using a browser, calling Skills and scheduled tasks, and includes an Office suite, professional image and video design, and app and website generation.

Source: Volcano Engine official

Some users complained in community groups that although Doubao Pro offers more than five times the usage quota of the free version in expert mode and office task mode, “generating one 30-second video can use up 40% of the quota.”

The AI office market has already been occupied earlier by products such as Alibaba’s Qoder and Tencent’s WorkBuddy. Qoder Work began internal testing in January, while WorkBuddy began internal testing in February. According to media reports, Alibaba’s Qoder product family now has more than 5 million users and ARR has surpassed $60 million.

By contrast, ByteDance’s TRAE is still a step slower than its rivals, even though Hong Dingkun, ByteDance’s vice president of technology, disclosed that TRAE’s daily average token consumption had reached 5.6 trillion, up 50 times from last year.

By June this year, TRAE SOLO had been upgraded to TRAE Work. TRAE Work currently includes two core modes: Work and Code. Work is aimed at daily work scenarios such as content creation, data analysis, proposal writing, and communication and collaboration, while Code is aimed at programming scenarios.

Tan Dai told China Entrepreneur and other media that the outside world pays more attention to Seedance because it is the first global SOTA product, but internally, Volcano still sees coding as very important. In AI coding products, Volcano Engine already has the low-code platform Coze, as well as high-code platforms HiAgent and Trae, improving efficiency for ordinary users, enterprises, and professional developers respectively.

Notably, on June 23, Alibaba’s coding product Qoder announced a “nighttime discount” campaign across the entire Qoder family. The model capabilities remain unchanged; only the pricing changes. The same day, Alibaba’s video generation model HappyHorse 1.1 was officially released.

But Tan Dai and Volcano Engine still do not seem anxious about the computing power bill. What he talks about more are token value, model capabilities, production-grade industrial scenarios, and understanding customer use cases.

“AI is still in its early stage. Last year it ran 500 meters; this year it has run more than 1 kilometer. But this kilometer has already crossed the qualitative threshold for production. Models can now create value within production processes, and that is very important.”