Zhang Yiming Becomes Asia's Richest Person: A Transformation of Wealth Based on "Expectations" and "Bets"
Hello everyone, I'm your financial observer. Today, we're going to discuss a big story that may seem glamorous on the surface but actually hides some complex underlying dynamics: Zhang Yiming, at the age of 43, has a net worth of over $105 billion, making him Asia's richest person for the first time.
Many media outlets are cheering, saying, "Look! The AI era has arrived! Traditional industries are failing, and ByteDance has won!"
But if you only see that surface level, you're missing the deeper story. As a journalist who often analyzes financial logic, I need to share an counterintuitive fact with you: **Zhang Yiming didn't become Asia's richest person because ByteDance is making more money now; on the contrary, it's because the company is losing more money and borrowing more, yet the market is willing to pay for this "crazy investment."
Behind this is a complete shift in the way wealth is valued. Let me break down this phenomenon into five key points to help you understand the truth behind those $105 billion in simple terms.
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1. The Unusual "Richest Person": Profit is Declining, but Net Worth is Rising
First, let's address the most obvious contradiction. Logically, if a company's profits are declining, the owner's net worth should decrease or at least stagnate. However, for ByteDance:
- Revenue: Approximately $120 billion in the first half of 2026, a 30% increase year-on-year (the business is still growing).
- Net Profit: Around $20 billion, which is decreasing year-on-year (the company is making less money).
- Zhang Yiming's Net Worth: Soared to $105 billion, surpassing India's richest person, Gautam Adani.
It's like a restaurant owner who sells more food every day, but at the end of the year, realizes the net profit has decreased, yet his net worth has tripled, making him the local richest person. Is that reasonable?
Not really, but in the AI era, that's just how the market works.
Why? Because ByteDance is investing almost all its earnings in AI infrastructure, cloud services, and the development of large models. On the financial statements, these investments are recorded as "current expenses" or "capital expenditures," which directly reduce the company's profits.
In simple terms: ByteDance isn't saving money; it's "spending money to buy the future." The market isn't punishing it for its declining profits; instead, it's rewarding it for this kind of reckless investment. This shows that the market no longer focuses on how much you've made now but on how much you're willing to bet on the future.
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2. Borrowing to Bet: From "Using Profits to Buy the Future" to "Using the Future to Secure Loans"
If ByteDance were just using its profits to invest in AI, that would be a normal business decision: spending less this year to earn more next year.
But this time it's different. The news mentions a key detail: ByteDance recently secured a loan of approximately $29.6 billion.
Looking at these two figures:
- Net Profit in the First Half of the Year: Around $20 billion.
- New Loan: Approximately $29.6 billion.
What does this mean? It means that the intensity of its AI investments has exceeded ByteDance's ability to cover with its own cash flow.
ByteDance has always been called a "cash cow" and has never lacked money, even being jokingly referred to as a "giant that doesn't need to raise funds." But now, it's starting to borrow on a large scale.
It's like a person with a high salary and a comfortable life who suddenly starts using credit cards and taking out high-interest loans to buy a house that's not even built yet. Why? Because housing prices are rising too fast, and they're afraid they won't be able to afford it or will miss out.
In the AI race, the entry fee has become so high that even ByteDance needs to leverage its resources to compete. At this point, the situation changes:
- Previously: Using today's profits to buy tomorrow's earnings.
- Now: Using tomorrow's income to secure today's debts.
Zhang Yiming's $105 billion net worth is largely based on this leverage. The market believes that as long as ByteDance can continue to borrow and invest, it will succeed.
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3. The Change in Valuation Method: From "Settling the Past" to "Settling Expectations"
Why is the market willing to value a company with declining profits and increasing leverage so highly?
Because AI has changed the way wealth is recorded.
- Old Model (Traditional Industries): For example, Adani's ports, energy, infrastructure. These businesses are stable, and the value is based on cash flow: If you earn $100 this year, you get a $100 valuation. These assets grow slowly but are reliable.
- New Model (AI Technology): The market believes that AI is a "winner-takes-all" game. If you don't invest, you're out; if you do, even if you're losing money now, as long as you can show you have the ability to continue investing, you're still in the game.
So, capital expenditures (investments) are no longer considered costs but rather "evidence of staying in the game."
Having over 300 million monthly active users and a working Seedance model are positive factors, but their current revenue doesn't support this surge in valuation. What's really being valued is ByteDance's ability and willingness to invest billions in the future.
This is what's meant by "prepaying for the future." The market isn't paying for what ByteDance has already achieved but for what it promises to do.
This also explains why the news frames it as "the new economy defeating traditional industries." It's not about which company is stronger, but about two different valuation systems colliding: one in the expansion phase (valued based on expectations) and the other in the maturity phase (valued based on cash flow). The former is more volatile and has a higher potential, while the latter is more stable.
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4. The Fragile Safety Net: Once Beliefs Waver, the Reversal is Quick
Now, let's talk about the weaknesses of this logic.
Valuing a company based on profits has one advantage: profits provide a bottom line. But valuing it based on investments and narrative has a fatal flaw: it lacks a safety net and relies entirely on "belief."
The foundation of Zhang Yiming's $105 billion net worth is based on one condition: everyone continues to believe that these investments will pay off.
What happens if that belief wavers?
- The $29.6 billion loan could instantly turn from a "bold strategic move" into a "dangerous debt risk."
- The declining profit curve could instantly become a sign of weakening profitability.
- The same numbers could be interpreted completely differently.
This is feedback loops: During a boom, the more you invest, the higher the valuation, and the easier it is to raise funds, creating a positive cycle; during a downturn, more doubts arise, the lower the valuation, and financing becomes harder, forcing reduced investment, creating a negative cycle.
Zhang Yiming's current position is similar to Adani's in 2022: both were pushed to the top of the list at the peak of their respective narratives (Adani's in energy and infrastructure, Zhang Yiming's in AI models).**
The difference is that Adani invested in tangible assets (ports and power plants), while Zhang Yiming invested in intangible assets (AI models). A billionaire position built on "prepayments" is entirely dependent on whether those investments will actually pay off.
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5. The Core Lesson: What Matters Isn't What You've Earned, but What You're Willing to Bet
Finally, let's return to the news itself.
The statement that "AI created $105 billion in wealth" reverses the cause-and-effect relationship. AI didn't directly create that wealth; it changed the way wealth is recorded.
- Old Rule: You're worth as much as you've earned. (Valued based on the past, stable but less flexible.)
- New Rule: You're worth as much as you're willing to bet and how many people agree with that bet. (Valued based on expectations, more volatile but potentially higher.)
The direct consequence of this shift is that the volatility of wealth has increased significantly.
Numbers based on expectations can change at any time. And a company doesn't even need to make mistakes; a shift in market consensus can halve a billionaire's net worth.
So, when you read the news that "Zhang Yiming became Asia's richest person for the first time," what's important to remember is not just the $105 billion figure but the accompanying note: In the same half-year, the company's revenue increased by 30%, but its profits decreased.
Before this AI cycle ends, neither of these figures will be settled. But they clearly illustrate the new rules of valuation:
In this era, the value of a giant isn't determined by what you've earned in the past but by what you're willing to bet on the future.
Zhang Yiming's $105 billion is the reward for betting that the market believes in him, as well as the bet he made on the future. Whether he will ultimately succeed depends on how long the AI revolution continues.