ByteDance appears to be skirting US restrictions to buy Nvidia chips: Report

In Brief

Posted:

2:02 PM PST · December 30, 2024

Image Credits:David Paul Morris/Bloomberg / Getty Images

TikTok parent company ByteDance has big plans to buy Nvidia chips in 2025 — despite U.S. restrictions.

ByteDance plans to spend $7 billion on the chips in 2025, according to reporting from The Information, citing inside sources. If ByteDance follows through, it will become one of the world’s top owners of Nvidia chips, despite U.S. efforts to restrict Chinese companies from buying U.S. AI chips like these.

In 2022, the U.S. announced export restrictions on certain kinds of AI chips to countries, including China, where ByteDance is headquartered. These restrictions have gotten tighter multiple times since.

ByteDance is technically adhering to these restrictions by using a loophole: The company isn’t bringing the chips directly to China and is instead storing them in data centers located in other regions like Southeast Asia, according to The Information’s reporting. This doesn’t technically violate U.S. restrictions.

ByteDance runs Doubao, China’s “hottest” AI chatbot with 51 million active users, according to the South China Morning Post.