ByteDance Denies Reports of Developing Own Chips to Reduce Reliance on Nvidia

ByteDance, the parent company of TikTok, has refuted claims that it plans to develop its own chips to decrease its dependence on Nvidia. The Chinese tech giant stated that the semiconductor project is still in its early stages, focusing on cost optimization, and is fully compliant with trade regulations.

Contrary to rumors, ByteDance is not developing and producing two types of semiconductors by 2026 to reduce its reliance on leading U.S. chip design company Nvidia. Instead, the Beijing-based company is working on a semiconductor project that aims to optimize costs for businesses such as recommendation systems.

ByteDance emphasized that all of its semiconductor projects are “fully compliant with relevant trade regulations.” This statement comes in response to reports by U.S. technology news site The Information, which suggested that ByteDance plans to mass produce 5-nanometer (nm) semiconductors through Taiwan Semiconductor Manufacturing Co. (TSMC).

The U.S. trade sanctions have restricted the export of essential graphics processors (GPUs) such as the A100 and H100, which are crucial for artificial intelligence (AI) training systems, to China. As a result, Nvidia is developing alternative solutions like the H20 to cater to Chinese customers.

According to sources, ByteDance has invested $2 billion this year to purchase over 200,000 H20 devices. By developing its own learning and inference chips and having them manufactured by foundries, ByteDance can potentially save significant costs.

ByteDance’s entry into the semiconductor market was first announced in 2021, when a spokesperson revealed that the company was exploring AI chip opportunities. In June 2023, Reuters reported that ByteDance is developing a 5-nanometer AI processor in collaboration with U.S. chip designer Broadcom.

ByteDance has invested in several semiconductor companies, including InnoStar Semiconductor in 2023, Silicon Integrated in 2022, and Moore Threads Technology, a Chinese semiconductor design company subject to U.S. sanctions, in 2021.

As of now, ByteDance’s official website has posted over 260 semiconductor-related job openings, indicating the company’s growing interest in the semiconductor industry.