TikTok owner ByteDance is now China's biggest buyer of Nvidia chips as it seeks to lead AI race, report says

• US regulations bar China from directly acquiring Nvidia's powerful H100 GPUs.
• That hasn't stopped ByteDance from becoming Nvidia's largest buyer in China.
• The company is also working around the export ban by increasing computing capacity outside China.

ByteDance is the biggest buyer of Nvidia's AI chips inside China as the TikTok owner seeks to establish itself in the artificial intelligence sector, the Financial Times reported.

A US export ban introduced in 2022 restricts China from acquiring Nvidia's more advanced GPUs. One is the H100 — a coveted chip that powers data-hungry AI models and has helped turn Nvidia into a $3 trillion company amid the global AI boom.

The ban limits China to Nvidia's less powerful H20 chip. In May, Chinese government officials asked local tech companies to buy domestic-made chips instead.

Despite the US regulation and China's pleas, ByteDance has emerged as Nvidia's largest buyer of AI chips, sources who spoke to FT said. One source told the publication that ByteDance is Nvidia's largest customer in Asia.

The report did not disclose a figure, but The Information reported in September that the TikTok parent company placed orders for more than 200,000 Nvidia H20s this year.

Bytedance appears to be seeking a workaround to the US ban to get its hands on Nvidia's H100 and Blackwell chips by increasing computing capacity outside of China, including plans for new data centers in Malaysia, sources familiar with the matter told the FT.

ByteDance did not immediately return a request for comment from Business Insider on Sunday.

The TikTok owner's push to acquire more Nvidia chips is part of the company's broader effort to establish itself as an AI powerhouse.

The company has siphoned top engineers from rival companies and startups, according to the FT. In 2021, the company indicated plans to attract overseas AI talent, Business Insider reported.

Bytedance is also joining a chorus of Big Tech companies looking to disrupt Nvidia's dominance by developing its own chip. Sources familiar with the matter told the FT that the company is building an AI chip for machine learning modeled after Google's Tensor Processing Unit.

Earlier this year, ByteDance unveiled a tool not available to the public called StreamVoice. This tool allows users to change their voice into another person, such as a celebrity, with AI. The company also launched Cici AI, an AI-powered chat assistant that relies on OpenAI's GPT.

Amid its push to become a formidable player in the AI race, ByteDance still faces major hurdles, including a slowed user growth rate on TikTok and an uncertain future in the US, where an appeals court recently upheld a ban on the short-form video platform. Judges concluded that ByteDance must sell TikTok to avoid being banned from app stores.

Several ultrawealthy investors have offered to buy the platform, including Kevin O'Leary of "Shark Tank," former treasury secretary Steven Mnuchin, and billionaire former Dodgers owner Frank McCourt.

"We don't want to see it banned," McCourt said on Sunday on CBS's Face the Nation. "I'd add that President-elect Trump has also said he doesn't want to see it banned. So now, let's talk about the sale."