Beijing, China (Reuters) – An adequate supply of high-end processors would allow TikTok’s owner to secure them in the midst of the U.S.-Sino tensions. According to two people familiar with the situation, China’s ByteDance is collaborating with U.S. chip designer Broadcom on the development of an advanced AI processor.
According to the sources, the 5 nanometer device, sometimes referred to as an application-specific integrated chip (ASIC), would be manufactured by Taiwan’s TSMC and comply with US export regulations.
Since Washington implemented export limitations for sophisticated semiconductors in 2022, there have been no publicly disclosed chip development partnerships between Chinese and American companies employing 5nm or higher advanced technologies. In this industry, U.S.-China transactions typically involve significantly less advanced technology.
The individuals, who asked not to be named because semiconductor concerns in China are sensitive, claimed that ByteDance’s partnership with Broadcom, an established business partner, would help reduce procurement costs and provide a steady supply of higher-end chips.
ByteDance, like many other multinational IT companies, has made a significant push into generative artificial intelligence; but, compared to their international competitors, the Chinese company and its rivals face a significantly more constrained supply of AI chips.
U.S. export restrictions designed to obstruct China’s military’s advancements in AI and supercomputing have rendered Nvidia’s most sophisticated chipsets unattainable. There is intense competition for both Chinese-specific U.S. processors and those from rival Huawei, one of the few Chinese manufacturers of AI accelerators.
Broadcom and ByteDance have collaborated on projects together at least since 2022. According to disclosures made public by Broadcom, the Chinese company has acquired the U.S. company’s Bailly switch for artificial intelligence computer clusters and its Tomahawk 5nm high-performance switch chip.
ByteDance needs to secure AI chips in order to boost the power of its algorithms. Apart from TikTok and Douyin, the Chinese version of the short-video app, ByteDance has a number of well-known apps, such as Doubao, a chatbot service with 26 million users that resembles ChatGPT.
ByteDance has reportedly accumulated Nvidia processors to bolster its AI initiative, as per an individual who was informed about the situation.
The insider stated that ByteDance set aside $2 billion to buy Nvidia chips last year. This includes A100 and H100 chips that were available before to the imposition of the first wave of U.S. sanctions as well as A800 and H800 chips that Nvidia produced for the Chinese market but were later banned.
Ascend 910B processors from Huawei were also acquired by ByteDance last year, according to two different sources with knowledge of the situation.
One of the persons with insider knowledge of the matter claims that it has also been poaching highly skilled employees from other Chinese AI chip companies.