ByteDance plans to spend $7 billion on NVIDIA accelerators in 2025

The Chinese Internet holding company ByteDance, which owns the TikTok service, according to The Information resource, intends to purchase NVIDIA AI products worth up to $7 billion in 2025. If these plans can be implemented, ByteDance will have at its disposal one of the largest fleets of NVIDIA accelerators in the world.

The acquisition of advanced AI solutions by Chinese companies is difficult due to US sanctions. In 2022, the United States announced restrictions on the export of certain AI chips to China, and since then these measures have been tightened several times. Recently, the administration of US President Joe Biden restricted the export of HBM memory, which is used in high-performance AI accelerators, to China.

Formally, ByteDance adheres to sanctions restrictions: the company does not import accelerators directly into China, but uses them in data centers located in other regions, in particular in Southeast Asia. This scheme makes it possible to deploy AI platforms with the most modern and productive accelerators.

Image source: ByteDance

In particular, it was previously reported that ByteDance is implementing a large-scale project to expand its data center campus in Malaysia: over $2 billion will be spent on creating a hub for AI workloads. In addition, ByteDance expects to open a new data center in Thailand. At the same time, the company is designing its own AI accelerators, which are expected to help reduce dependence on NVIDIA products in the future. Thus, ByteDance is collaborating with Broadcom on a 5nm AI solution that meets all restrictions: the Taiwanese TSMC will produce this chip.

According to The Information, ByteDance will spend part of the $7 billion funds on renting computing power in American clouds. It is known that Chinese organizations have found a loophole in US laws: they use the cloud services of Amazon, Microsoft and their competitors to access advanced chips and AI technologies. Thus, ByteDance remains the largest consumer of Microsoft Azure OpenAI services.