ByteDance, the Chinese owner of TikTok, is working with U.S. chip designer Broadcom to develop an advanced artificial intelligence processor, Reuters reported on Monday. It comes as the company seeks to ensure a stable supply of high-performance chips for its AI products amid U.S. – China tensions.
Also read: China’s AI companies start a fierce pricing war
The companies are building a customized 5-nanometer chip, also known as an application-specific integrated circuit (ASIC), which complies with U.S. export rules, the report said, citing insiders. Manufacturing will be outsourced to major Taiwanese chipmaker, TSMC, it added.
ByteDance wants AI for ‘more powerful algorithms’
ByteDance is making big moves in generative AI and is keen to secure high-end chips “to make its algorithms more powerful.” The firm operates popular apps including TikTok and Douyin, a Chinese version of the short-video app. It also runs a ChatGPT-like AI chatbot service called Doubao.
The Beijing-based company has relied on Nvidia’s chipsets like the A100 graphics processing units and others, which it has reportedly stockpiled. However, ByteDance and other Chinese firms have been hit hard by U.S. sanctions aimed at stopping the export of the most advanced chips to the Asian country.
Nvidia’s chips are used by companies such as OpenAI and Microsoft to run large language models and other AI apps. According to the Reuters report, the ByteDance and Broadcom tie-up is the first major 5nm chip development deal to be made public since the U.S. export restrictions for ‘cutting-edge semiconductors” to China came into force in 2022.
Other deals between the world’s two biggest economies involved less powerful AI processors, the report said. The move is seen as a way for ByteDance to reduce its dependence on Nvidia-made GPUs, which are in short supply not only because of high demand but also due to the U.S. export controls.
With the planned AI chip, ByteDance will have more control over its hardware, allowing the company to secure a stable supply of chips for its AI projects at a much lower cost and more efficiently. The report says TSMC is “not expected to start manufacturing the new chip this year.”
AI chip demand surges
ByteDance and Broadcom have been partners since 2022. The TikTok creator has previously bought the U.S. company’s “Tomahawk 5nm high-performance switch chip and its Bailly switch for AI computer clusters.”
The development comes at a time when demand for artificial intelligence chips is soaring. LLMs, the technology behind chatbots such as ChatGPT, require massive amounts of computing power to train and run. This has led to a shortage of AI chips, causing prices to rise. The Nvidia A100 GPU reportedly costs $15,000 each.
Also read: Chipmaker Nvidia overtakes Microsoft as world’s most valuable company
A report released by research firm TrendForce in March last year revealed that the number of Nvidia’s graphics processing units that OpenAI’s GPT model needed to process training data in 2020 came to about 20,000. As ChatGPT continues to evolve, that figure is also expected to continue to grow, it said.
Cryptopolitan Reporting by Jeffrey Gogo
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