ByteDance Finds a Workaround to Access Nvidia’s AI Chips
Despite the US restrictions on selling advanced Nvidia AI chips to China, ByteDance, the parent company of TikTok, appears to have devised a clever strategy to access these high-demand technologies. According to The Wall Street Journal, the company is quietly building a substantial network of top-tier Nvidia AI chips that it is unable to purchase directly due to US export regulations.
Reports indicate that ByteDance is collaborating with cloud computing firms and data centers located outside China. Key to this operation is Aolani Cloud, a relatively unknown Southeast Asian company, which is helping ByteDance gain access to these coveted chips.
New AI Capabilities in Malaysia
Sources suggest that ByteDance is working with Aolani to set up approximately 500 Blackwell computing systems in Malaysia, featuring around 36,000 of Nvidia’s advanced B200 chips. The total cost of this hardware could exceed $2.5 billion if fully realized. The chips are being integrated into servers by a company named Aivres, which Aolani has been acquiring them from. ByteDance plans to lease this computing power for its AI research and development, responding to the increasing global demand for its AI products.
Crucially, while ByteDance will benefit from this technology, Aolani will retain ownership of the chips. Since Aolani operates from Malaysia, it appears to navigate around the restrictions rather than directly breaking the rules.
An Nvidia representative stated that their compliance team reviews all cloud partners before any chip sales, emphasizing that the export rules permit cloud operations outside controlled countries such as China.
Aolani has confirmed its commitment to following all applicable export regulations, with the help of a US law firm for compliance.
Broadening Access Across Southeast Asia
In addition to Malaysia, ByteDance is reportedly discussing plans to use AI servers with over 7,000 B200 chips in a data center in Indonesia.
This trend of Chinese companies seeking intermediaries to access Nvidia chips is not new. Countries like Malaysia, Indonesia, Singapore, South Korea, and parts of Europe have become popular venues for such arrangements.
ByteDance has quickly emerged as one of the fastest-growing AI firms, boasting five of the world’s top 50 AI consumer applications based on monthly active users. Its AI offerings include Dola, a chatbot; Dreamina, a video creation tool; Gauth, a homework assistant; and its latest, Seedance, an AI video generation model capable of translating script prompts into realistic short film scenes.
