ByteDance Plans to Spend $7 Billion on Nvidia Chips Despite US Restrictions

ByteDance, the parent company of TikTok, is planning to spend $7 billion on Nvidia chips in 2025, despite ongoing US restrictions on such sales to Chinese companies, reports TechCrunch, citing a report from The Information.

If finalized, the purchase will establish ByteDance as a major consumer of Nvidia chips, exceeding its current capacity by a significant margin.

The Information's report, citing unnamed sources, indicates that ByteDance is navigating US restrictions by storing the chips in data centers outside of China, such as in Southeast Asia.

The US Department of Commerce first imposed restrictions on the export of advanced AI chips to China in 2022, with these restrictions tightening over time.

ByteDance's approach of purchasing chips and storing them in overseas data centers is said to comply with the letter of the US restrictions.

This move by ByteDance is likely driven by the success of Doubao, its AI chatbot, which boasts over 50 million active users in China.

The company maintains that it is fully compliant with US restrictions, stating to TechCrunch, "ByteDance has not bought H100s for its data centers outside of the U.S. since the relevant US export control rules took effect."

However, the sheer scale of the planned purchase, coupled with the indirect acquisition method, suggests a determined effort to overcome the limitations imposed by US regulations.