ByteDance has become the biggest client of Nvidia’s AI chips in China and potentially across Asia despite the US export ban on China for them.
TikTok-parent company ByteDance is emerging as one of the toughest competitors in China's AI landscape. The company has been investing heavily in AI infrastructure led by its founder, Zhang Yiming. ByteDance has been procuring the maximum semiconductor AI chips from Nvidia and has now become its biggest customer in China.
According to the people familiar with the matter, Zhang has also been aggressively poaching top AI talents from Alibaba and Baidu to enhance its AI offering capabilities. According to reports, ByteDance’s main products, TikTok and Douyin, have been witnessing a slowdown amid ongoing international bans from multiple countries, including the US and India. A recent US court ruling compels ByteDance to divest from TikTok or face chances of a permanent ban in the country.
A company insider revealed that Yiming has realized the potential of large language models to change the industry and has decided to invest heavily in achieving artificial general intelligence capabilities. Nvidia plays a key role in providing the top AI infrastructure to build and scale ByteDance’s AI ambitions.
However, ByteDance is allowed to procure only H20 AI chips from Nvidia to power its AI infrastructure. These chips are less powerful and are customized to meet US export control conditions. If ByteDance finds a way to operate outside China, the company will become eligible to buy Nvidia’s top-of-the-line AI chips, including H100s and Blackwell, for its data centers.
While finding a sustainable partnership condition is immediately important, ByteDance is also pushing efforts to build its own AI chips to minimize reliance on external suppliers like Nvidia. This move comes from the world-record-high demand for Nvidia among top global tech giants like Google, Microsoft, and Meta, who do not face similar procurement restrictions.
Meanwhile, ByteDance’s new AI app, Doubao, is quickly gaining popularity in China. The AI chatbot, which now boasts millions of monthly active users, directly rivals OpenAI’s ChatGPT. The company has also launched an overseas chatbot, Cici AI, which third-party models like OpenAI’s ChatGPT power. Though not the best of generative AI chatbots, Cici AI comes with search, translation, and image and video generation capabilities.
