ByteDance’s strategy for securing access to AI chips has taken a new direction, with reports suggesting that TikTok’s parent company plans to invest $7 billion in Nvidia chips through facilities outside of China by 2025. This move is part of a broader effort by Chinese tech companies to maintain access to advanced AI hardware despite the US export restrictions.
The report indicates that ByteDance’s co-founder, Zhang Yiming, has been in talks with data center operators in Southeast Asia to acquire Nvidia’s upcoming Blackwell chips when they become available in 2025. This follows a trend of Chinese companies finding alternative ways to obtain advanced semiconductor technology. In June 2024, ByteDance reportedly bypassed restrictions by renting Nvidia’s high-performance chips from Oracle for its AI operations, showing the company’s ability to navigate around trade barriers.
ByteDance’s planned $7 billion investment in overseas chip access would make it one of Nvidia’s biggest global customers. Sources familiar with ByteDance’s infrastructure plans have suggested that the company might spend even more, potentially over $20 billion in 2025, on AI chip access, data centers, and related infrastructure, including undersea cables.
This strategy comes as the US ramps up efforts to limit Chinese companies’ access to advanced semiconductor technology. Current US sanctions prevent Chinese firms from legally purchasing high-end semiconductor tech from countries that are influenced by US policy. The Biden administration has already imposed export bans on the latest Nvidia and AMD GPUs to certain Middle Eastern countries, partly due to concerns that the UAE could act as a “transshipment point” for restricted technologies.
ByteDance’s push to expand its data center presence serves two purposes: meeting its growing computational needs and addressing concerns around data sovereignty. The company’s efforts to secure access to chips through international facilities show how Chinese tech companies are balancing the need for technological growth with compliance to regulations.
This situation also raises broader questions about the global semiconductor industry and international trade relations. While renting advanced GPUs in the US does not violate current sanctions, the shifting regulatory landscape could prompt changes in how companies access critical AI resources.
As Chinese tech firms continue to advance AI applications, having access to cutting-edge semiconductors remains crucial for staying competitive. ByteDance’s significant investment plans underscore the importance of these resources and the lengths companies are willing to go to ensure they continue to have access to top-tier technology.
The ongoing developments also highlight the challenges in international technology supply chains. As companies find innovative ways to secure the resources they need, policymakers must balance national security concerns with the realities of a globally connected market.
