ByteDance Denies Nvidia Chip Replacement Plans; No Intent to Develop Own Chips

ByteDance, the owner of TikTok, has denied reports that it plans to develop its own chips to reduce reliance on Nvidia. The Chinese tech giant stated its semiconductor initiatives are in the early stages, aimed at cost optimization, and fully compliant with trade regulations.

ByteDance Rejects Nvidia Replacement Plans

The owner of TikTok, ByteDance, a Chinese digital behemoth, has disputed rumors that it intends to develop and manufacture two kinds of semiconductors by 2026 in an effort to reduce its need on Nvidia, a prominent US chip designer.

The Beijing-based company, which runs Douyin, the Chinese version of TikTok, has stated that its semiconductor initiatives "are in the early stage, focusing on cost optimization of recommendations, advertising and other businesses," according to local media, citing a statement written in Chinese by ByteDance.

ByteDance Confirms Trade Compliance

Every one of ByteDance's semiconductor initiatives are "in compliance with relevant trade control regulations," the company declared.

The US tech news site The Information (via SCMP) claimed on Monday that ByteDance was planning to hire the world's largest chip foundry, Taiwan Semiconductor Manufacturing Company (TSMC), to mass-produce two 5-nanometer semiconductors that the Chinese unicorn had built. This prompted the response.

The article states that the goal of these initiatives is to lessen the reliance of ByteDance on Nvidia in order to circumvent US export rules.

Nvidia Affected by US Export Regulations

The A100 and H100 graphics processor units, which are highly sought-after by AI training systems, are unable to be exported to China by Nvidia due of US trade penalties. As a means of satisfying their Chinese customers, the American firm has developed solutions like the H20.

The Information said, citing an anonymous source, that ByteDance has spent over $2 billion on over 200,000 H20 devices this year, as per Yahoo Finance. The study claims that ByteDance may save a significant amount of money by developing its own training and inference chips and having them manufactured by a foundry.

When a representative from ByteDance stated that the company was seeking prospects in artificial intelligence chips in 2021, it was the first public announcement that the company was entering the semiconductor market. The company has collaborated with Broadcom, a US chip designer, on a 5-nm artificial intelligence processor, as reported by Reuters in June.

Semiconductor Investments by ByteDance

In March, ByteDance invested in InnoStar Semiconductor; in 2022, it invested in Silicon Integrated; and in 2021, it invested in US-sanctioned Moore Threads Technology, two Chinese semiconductor design companies.

More than 260 semiconductor-related job openings were posted on the company's official website as of Wednesday.