Bytedance Turns To Huawei AI Chips Amid U.S. Restrictions

Key takeaways

ByteDance, the Chinese parent company of TikTok, is reportedly planning to develop an artificial intelligence model trained primarily with chips from domestic supplier Huawei Technologies, according to three people familiar with the matter.

The move represents a strategic pivot as U.S. export restrictions continue to limit Chinese companies' access to advanced American-made semiconductors.

The social media giant has diversified its chip suppliers and accelerated development of its own technologies since the United States began restricting exports of advanced AI chips in 2022.

ByteDance's next step involves using Huawei's Ascend 910B chip to train a large-language AI model, said the sources, who declined to be identified as the plan remains confidential.

Supply constraints delay development timeline

ByteDance has ordered more than 100,000 Ascend 910B chips this year but received fewer than 30,000 as of July, a pace too slow to meet the company's needs.

The constrained supply and limited computing power compared to Nvidia's China-available chips have prevented ByteDance from setting a timeline for the new model, two of the sources said.

The company currently uses the Ascend 910B primarily for less computationally intensive inference tasks, which involve pre-trained AI models making predictions.

Training AI models is far more demanding and requires huge amounts of data, necessitating ultra-high-performance chips such as Nvidia's premium graphics processing units.

The new model's capability and complexity would be less powerful than ByteDance's existing AI model Doubao, one source said. Doubao, launched in August 2023, has become one of China's most popular apps with more than 10 million monthly active users.

ByteDance denies new AI model development

Despite multiple sources confirming the plans, ByteDance officially denied the reports. Michael Hughes, a TikTok spokesman in Washington D.C., said speaking on behalf of ByteDance, "The entire premise here is wrong. No new model is being developed."

Huawei did not respond to requests for comment.

Navigating the U.S.-China chip war

The increased emphasis on AI has made ByteDance one of the largest buyers of Huawei's AI chips.

The company is also the biggest buyer of Nvidia's H20 AI chip, which the U.S. chipmaker tailored for the Chinese market in response to trade restrictions.

Additionally, ByteDance is Microsoft's biggest client in Asia for Nvidia chips accessible via cloud computing.

Reuters previously reported that ByteDance allocated $2 billion for Nvidia chips last year.

The company's reliance on multiple chip sources reflects the challenging landscape Chinese tech firms face as they seek to maintain their AI capabilities while navigating geopolitical tensions.

Recent reports indicate ByteDance's domestic chip procurement could exceed 40 billion yuan (approximately $5.7 billion) in 2026, signaling a dramatic shift toward Chinese suppliers.

This increase is driven by the computing power gap that emerged after restrictions on Nvidia's H20 supply and explosive growth in demand for ByteDance's cloud computing business and AI applications.

The U.S. export controls, implemented in October 2022, banned the sale to China of any AI chips equal to or more capable than Nvidia's A100 chip.

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