Funding APAC's AI Revolution #4: how will Chinese internet majors fund capex?

Building on Funding APAC's AI Revolution #2, which estimated onshore AI capex for Chinese internet majors (Baidu, Alibaba, Tencent and ByteDance) over '26-30E, this report examines their funding gaps and potential offshore bond issuance. We estimate internet majors' total capex at US$1.2tn over '26-30, comprising US$935bn of onshore AI capex, US$175bn of onshore non-AI capex across other businesses and US$105bn of offshore AI capex, assuming 2.5-3.5GW of overseas leased capacity at US$35bn/GW. We focus on BAT, given ByteDance's limited financial disclosure and lack of outstanding bonds. We assume BAT accounts for 50% of total capex, implying US$555bn of onshore and US$53bn of offshore capex. Onshore needs should be largely self-funded: assuming a 15% 5-year CAGR, we estimate US$637bn of EBITDA over '26-30, which should more than cover US$555bn of capex, implying a US$82bn cumulative surplus. Offshore needs, however, require external financing: we expect limited cash generation against