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TikTok giant ByteDance is developing two AI chips in partnership with Taiwan Semiconductor, with plans to mass-produce them by 2026. Here's how this could impact the tech industry
TikTok owner ByteDance is taking a major step towards developing its own AI chip technology (IA). According to information from The Information, the company is collaborating with the Taiwan Semiconductor Manufacturing Company (TSMC) to design two chips that it hopes to mass produce by 2026.
This strategic move could reduce ByteDance's dependence on expensive Nvidia GPUs, which are subject to US export restrictions.
ByteDance, owner of Tiktok, has already shown its interest in AI by launching, last August, the chatbot Doubao, a rival to Baidu's Ernie Bot, considered a Chinese version of ChatGPT.
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Doubao has surpassed its competitor in downloads and active users in China, making it a competitive and affordable alternative. In addition, the parent company of Tiktok has made Doubao’s large language models (LLMs) available to businesses, offering more cost-effective solutions compared to its rivals.
ByteDance's geopolitical decision
The in-house production of AI chips comes as a response to the barriers imposed by US export controls, which affect Chinese companies' access to essential components, such as chips from Nvidia.
ByteDance recently reportedly placed orders for more than 200 Nvidia H20 chips, one of the few models allowed by U.S. regulators. However, the company is still waiting for delivery, which is estimated to cost more than $2 billion.
By producing its own chips in collaboration with TSMC, ByteDance hopes to save billions and accelerate the development of its AI technologies. This move is also being closely watched by competitors, with Baidu also designing its own AI chip, the Kunlun 3, which is expected to be manufactured by TSMC.
The advance of Chinese companies in the AI sector is a reflection of the country's effort to position itself as a global leader in this technology, despite sanctions and restrictions imposed by the United States. The collaboration with TSMC, however, depends on compliance with American regulations, which are reviewed and updated annually.
Thus, ByteDance is preparing to compete even more aggressively in the global AI market, seeking technological independence and cost reduction.
