ByteDance denies pushing for its own AI Chips despite all its investments in semiconductors

Chinese technology giant ByteDance, the owner of TikTok, has denied claims that the company is planning to design and produce two types of semiconductors by 2026 to cut reliance on Nvidia.

ByteDance clarifies that its initiatives are in the early stages, aimed at cost optimisation and fully compliant with trade regulations.

Nvidia Affected by US Export Regulations

ByteDance's response comes after an article published by media outlet, The Information, who reported that Bytedance was stepping up its AI chip effort by engaging with Taiwan Semiconductor Manufacturing Company (TSMC) to mass produce two-5 mamometre semiconductors designed by the Chinese mega corporation.

The reports speculates that these efforts are motivated by ByteDance's goal of reducing its reliance on Nvidia, following the trade sanctions that have hindered ByteDance from getting their hands on the latest A100 and H100 chips. Instead, Nvidia was given the H20 chip.

The report estimates that ByteDance spent US$2 billion on more than 200,000 units of the H20 this year. The report claims that ByteDance may save a significant amount of money by developing its own training and interference chips and having them manufactured by a foundry.

Semiconductor Investments by ByteDance

Although ByteDance has denied all the allegations of trying to dabble into the Semiconductor industry, its business acquisitions seem to say otherwise. On top of its acquisition with TSMC, Nvidia has also teamed up with another US chip designer Broadcon on a 5-nm AI processor, according to a Reuters report in June. It also invested in a number of Chinese chip design companies including Innostar Semiconductor in March, Silicon Integrated in 2022 and US sanctioned Moore Threads Technology in 2021.