Why It Matters: ByteDance’s move to use Huawei chips for AI model training comes amid escalating U.S.-China tech tensions. In June, ByteDance reportedly collaborated with U.S. chip designer Broadcom to develop an advanced AI processor, compliant with U.S. export restrictions. This collaboration aimed to secure a stable supply of high-end chips.

ByteDance has diversified to domestic suppliers of chips used in artificial intelligence and accelerated development of its own since the U.S. in 2022 started restricting exports of advanced AI chips such as from market leader Nvidia.

ByteDance ordered over 100,000 chips this year but received fewer than 30,000 by July, slowing the company’s progress. ByteDance reportedly spent over $2 billion on NVIDIA’s H20 chips in 2024, but it

AI has become central to the technology industry with firms in sectors as varied as gaming and e-commerce differentiating offerings through the integration of custom AI models - programs that employ pattern recognition to make decisions.

ByteDance has reportedly ordered over 200,000 of NVIDIA's H20 chips, specifically designed to comply with US export controls. The company is still awaiting this order, which is worth over $2 billion.

TikTok's Chinese parent ByteDance plans to develop an AI model trained primarily with chips from compatriot Huawei Technologies, said three people familiar with the matter, as U.S. curbs turn the social media giant homeward in search of chips.