ByteDance’s $7B Nvidia Gambit — Chips Reportedly Stored Offshore to Sidestep US Export Rules

  Key Takeaways

• Despite U.S. export restrictions, ByteDance will reportedly spend a massive $7 billion on Nvidia chips.
• ByteDance appears to be navigating U.S. export controls by acquiring Nvidia chips in regions outside of China.
• However, ByteDance is not solely reliant on Nvidia.

ByteDance will reportedly circumvent U.S. restrictions on artificial intelligence (AI) chip exports to China by acquiring Nvidia GPUs for its data centers in other regions, such as Southeast Asia.

However, the TikTok parent company is not relying on Nvidia alone; other Chinese firms have started manufacturing high-performing chips.

ByteDance To Spend $7B On Nvidia Chips

ByteDance, the parent company of TikTok, is reportedly planning a significant purchase of Nvidia chips in 2025 despite U.S. restrictions.

According to sources cited by The Information , ByteDance intends to spend $7 billion on these chips, making the company one of the largest owners of Nvidia chips globally. This comes amid U.S. efforts to block Chinese firms from acquiring American AI chips.

ByteDance currently uses Huawei’s Ascend 910B chip  to train large-scale language models, primarily for less compute-intensive inference tasks involving pre-trained AI models to make predictions.

However, training AI models is far more demanding and requires vast amounts of data, necessitating the use of high-performance chips like Nvidia’s premium graphics processing units.

Avoiding U.S. Export Ban

In 2022, the U.S. imposed export restrictions on certain AI chips to countries like China, where ByteDance is headquartered. These restrictions have become progressively stricter over time.

ByteDance appears to be circumventing these restrictions by taking advantage of a loophole. Instead of importing the chips directly into China, the company stores them in data centers located in other regions, such as Southeast Asia.

This approach allows ByteDance to stay within U.S. regulations’ bounds, as The Information reports. The company insists it has complied with all U.S. export restrictions, with a spokesperson saying :

“ByteDance has not bought H100 chips for its data centers outside of the U.S. since the relevant U.S. export control rules took effect.”

While the U.S. has blocked ByteDance from purchasing Nvidia GPUs and using American cloud services, it cannot prevent the company from accessing cloud services in other regions, such as the Middle East or Asia.

This allows ByteDance to legally acquire American processors while technically complying with U.S. sanctions aimed at China’s AI and high-performance computing sectors.

No Longer Looking For Alternatives?

Despite reports of Nvidia chips being smuggled into China, the Chinese AI sector will likely need to find alternative sources of high-performance GPUs if it is to continue growing.

Chinese companies are developing their own versions of Nvidia’s chips. This may mean firms like ByteDance may no longer need to seek Nvidia alternatives as Chinese companies produce them.

Huawei is leading the effort with its Ascend 910B, which performs similarly to Nvidia’s A100. The company is also promoting its upcoming Ascend 910C, which is comparable to Nvidia’s H100.

While Huawei may still lag behind Nvidia, its chips are now sufficiently advanced for ByteDance to use the 910Bs to train a new large language model (LLM).

In addition to working with Huawei, ByteDance is collaborating with Broadcom  to develop two custom GPUs, which will enter production by 2026.