ByteDance, the parent company of TikTok and a leading Chinese artificial intelligence (AI) corporation, is expected to secure a large number of NVIDIA AI chips next year despite U.S. regulations. Following the inauguration of the second Trump administration next month, advanced semiconductor regulations against China are predicted to intensify, but ByteDance plans to gather NVIDIA's advanced chips while also developing its own AI chips.
According to IT media outlet The Information on the 30th (local time), ByteDance plans to invest $7 billion (approximately 10.3 trillion won) next year to procure NVIDIA's flagship AI chip 'Hopper' GPU (graphics processing unit). If this plan materializes, ByteDance is expected to become one of the global corporations that owns the most NVIDIA chips despite strong U.S. regulations. Since October 2022, the U.S. government has prohibited the export of AI chips to China to prevent advanced semiconductor technology from being used to bolster China's military capabilities. In particular, by restricting exports of NVIDIA's core GPUs to China, NVIDIA is now selling the GPU H20, which has significantly lower performance than its flagship chips, in the Chinese market.
In this situation, ByteDance is reportedly securing NVIDIA's advanced AI chips by utilizing third countries. The Information reported that ByteDance does not directly bring NVIDIA's advanced chips into China but stockpiles them in data centers located throughout Southeast Asia. The company is said to be utilizing chips from data centers in countries not subject to U.S. regulations. In fact, ByteDance has established long-term usage plans with local data center operators in Malaysia and Singapore.
Industry sources believe that ByteDance has been capitalizing on loopholes in U.S. regulations to acquire NVIDIA AI chips early on. ByteDance operates the most popular AI chatbot in China, Doubao (豆包), and over the past two years, it has reportedly purchased a large number of NVIDIA's cutting-edge chips to build advanced AI models. An IT industry official noted, 'This year, in Asia, Chinese corporations, including ByteDance, have secured the most NVIDIA chips,' adding, 'Due to supply shortages and high prices, NVIDIA superchips that Asian companies could not acquire in bulk are easily found in China.' It is also reported that Chinese corporations are establishing disguised entities locally to purchase NVIDIA chips, in addition to utilizing third-country data centers.
Going a step further, ByteDance has also rolled up its sleeves for the development of its own AI chips. The Financial Times (FT) reported on the 13th that ByteDance has recruited numerous talents from major Chinese chip corporations to form an AI chip development team. This team is said to be developing customized AI chips (ASICs) specialized in machine learning. Ultimately, the goal is to reduce dependency on NVIDIA chips and enhance AI large language models (LLMs) like Doubao through its own AI chips. According to Aicpb.com, which ranks AI product usage, Doubao launched in May recorded 59.98 million monthly active users in November. While this falls significantly short of OpenAI's ChatGPT user count (287 million), it is still the second largest in the world.