Despite the US ban on sales of Nvidia’s cutting-edge AI chips to China to keep them out of the hands of Chinese companies, TikTok’s parent company ByteDance has reportedly found a way around it. The Wall Street Journal reports that the internet giant is secretly building a large network of high-end Nvidia AI chips that cannot be legally purchased directly due to U.S. export restrictions.The company is said to be partnering with cloud computing companies and data centers based outside China’s borders. At the center of the deal is a little-known Southeast Asian company called Aorani Cloud, according to the report.
How ByteDance has access to Nvidia’s top chips
The Journal, citing people familiar with the matter, reported that ByteDance is working with Aolani to bring about 500 Blackwell Computing Systems, the top-of-the-line AI processors currently offered by Nvidia, to Malaysia. These systems are comprised of approximately 36,000 of Nvidia’s most advanced B200 chips. When fully completed, the associated hardware will likely cost more than $2.5 billion.The chips are reportedly assembled into servers by a company called Aivres, from which Aolani buys them. The computing power will then be leased to ByteDance for AI research and development to meet the growing global demand for ByteDance’s AI products.In this arrangement, ByteDance does not own the chip, Aolani does. Because the company is based outside of China and has operations in Malaysia, the organization appears to be operating in a legal gray area rather than directly violating existing regulations.According to the report, Aolani is a Tier 1 cloud partner of Nvidia, meaning it has been certified by the American chipmaker with priority access to the latest hardware. An Nvidia spokesperson told the publication that the company’s compliance team clears all cloud partners before selling chips, and that “by design, export rules allow us to build and operate clouds outside regulated countries like China.”Aolani said it is working with a U.S. law firm to ensure compliance, and a company spokesperson said the company is “in full compliance with all applicable export control regulations.”In addition to the Malaysia deal, ByteDance is also reportedly in talks to use AI servers equipped with more than 7,000 B200 chips at its data center in Indonesia.
Chinese company signs rental agreement for Nvidia chips
This is not the first time reports have surfaced that Chinese companies are looking for intermediaries to lend computing power to Chinese tech companies that do not have direct access to it. Malaysia, Indonesia, Singapore, South Korea, Australia, and parts of Europe are all attractive locations for this type of arrangement.ByteDance is the fastest-growing AI company and already runs five of the world’s 50 most popular AI consumer apps by monthly active users, according to a January ranking by venture capital firm Andreessen Horowitz. The company’s AI portfolio includes Dola, a chatbot. Video creation tool Dreamina. and Gaut, the homework assistant. The company’s latest standout product is Seedance, an AI video generation model that has garnered attention for its ability to turn written script prompts into realistic short film scenes.
