ByteDance, the parent company of TikTok, is reportedly planning to invest $7 billion in cloud-based access to Nvidia GPUs to bypass U.S. sanctions that restrict the purchase of high-performance AI processors by Chinese entities.
Chinese tech giant ByteDance, the owner of TikTok, is reportedly planning to invest heavily in cloud-based access to Nvidia GPUs to circumvent U.S. sanctions that prevent the company from purchasing the high-performance processors used for AI directly. that China’s ByteDance has set aside a staggering $7 billion budget to rent Nvidia GPUs through cloud services in countries outside the United States.
This move is part of the company’s broader $20 billion investment plan for AI infrastructure, which also includes data centers and submarine cables. The U.S. government has imposed restrictions on Chinese entities, including ByteDance, prohibiting them from purchasing and installing the most advanced Nvidia GPUs in their data centers within China. However, TikTok’s parent company has discovered a loophole that allows it to access these powerful processors by renting them from cloud service providers located in other countries, such as those in the Middle East or Asia. While ByteDance has denied the report, industry experts suggest that if the company does indeed invest $7 billion in cloud access to Nvidia GPUs, it would become one of the world’s largest consumers of AI hardware. The report estimates that at a price of around $1.3 per hour for on-demand access to Nvidia’s H100 GPUs, ByteDance could potentially rent a cluster of 614,682 H100 GPUs working around the clock for an entire year. However, it is uncertain whether there are sufficient H100 GPUs available for rent in the Middle East and Asia to meet ByteDance’s needs, and it is also unclear if the company requires such a large number of processors for its current AI projects. ByteDance’s largest known AI project is the Doubao AI chatbot, which has 51 million active users. Another possibility is that ByteDance may continue to procure Nvidia’s cut-down H20 HGX and B20 GPUs to run in its own data centers in China, in addition to renting processors from cloud provider
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