Editor’s Note: This story has been updated to include a comment from a ByteDance spokesperson.
TikTok-parent ByteDance has reportedly become the largest buyer of Nvidia Corporation NVDA chips in Asia, outpacing rivals like Alibaba Group Holding Ltd. BABA and Baidu Inc. BIDU.
What Happened: ByteDance has been aggressively hiring AI engineers from local competitors Alibaba and start-ups such as 01.ai and Zhipu.
The aim is to expand its teams to develop large language models and AI products, reported the Financial Times, citing multiple people with knowledge of the hiring process.
The company has also invested billions in AI infrastructure, purchasing advanced Nvidia GPUs to build sophisticated AI models, according to sources familiar with the matter.
Founder Zhang Yiming is leading this initiative at a crucial time, as growth for Douyin, TikTok’s Chinese counterpart, has plateaued. A U.S. court last week also upheld a law requiring ByteDance to sell TikTok by January or face a ban.
Central to ByteDance's AI growth is its strong commercial alliance with Nvidia. Due to U.S. export regulations, the company is restricted to purchasing Nvidia's H20 GPUs, a less powerful, specialized version for use in Chinese data centers.
However, ByteDance could access high-performance H100 and Blackwell chips for its operations outside China, the report noted.
Sources familiar with the situation reveal that ByteDance is currently Nvidia's largest customer in China, with one insider noting it has also emerged as the company's top buyer across Asia.
The company is also working on an AI chip, modeled after Alphabet Inc.'s GOOG GOOGL Google’s Tensor Processing Unit, to reduce reliance on Nvidia chips.
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In an email to Benzinga, ByteDance stated that it has neither purchased nor been permitted to purchase H100s and Blackwell chips for data centers located outside the U.S. since the export control rules came into effect on Nov. 17, 2023. Nvidia declined to comment on the story.
Why It Matters: Last month, it was reported that ByteDance's valuation soared to $300 billion, reflecting its optimistic growth outlook despite the looming threat of a U.S. TikTok ban.
Previously it was reported that ByteDance and other Chinese tech giants are expanding its AI footprint in Silicon Valley to attract top U.S. talent.
In response to U.S. restrictions on advanced AI chip exports, ByteDance has also been exploring domestic suppliers like Huawei Technologies for chip development. The company reportedly plans to use Huawei's Ascend 910B chip to train a large-language AI model.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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