The Chinese tech company ByteDance has been working with US-based chip designer Broadcom for at least the past two years to develop an advanced artificial intelligence processor, sources said.
The five-nanometer customized application-specific chip designed by the two companies would be manufactured by the Taiwan-based chip company TSMC, making it compliant with American export restrictions.
The partnership has not been publicly announced since the US introduced export controls on semiconductors in 2022.
The existing partnership with Broadcom would help cut procurement costs while ensuring a steady supply of more advanced chips, the unnamed sources said.
ByteDance, like every other tech company, launched a push into generative AI in recent years. However, like other Chinese tech firms, ByteDance has to contend with a limited supply of AI chips that its overseas competitors do not.
Due to US export controls, ByteDance was unable to access the most advanced chipsets from Nvidia. However, the company stockpiled available Nvidia chips to support its artificial intelligence efforts.
A source said ByteDance stocked up on A100 and H100 Nvidia chips that were available before the US imposed the first round of sanctions on semiconductors. It also had gobbled up the A800 and H800 chips Nvidia sold to the Chinese market before the 2022 restrictions.
In total, ByteDance budgeted $2 billion to purchase Nvidia chips.
Broadcom confirmed in public statements that it has been working with ByteDance since at least 2022, and the Chinese-based company has purchased Broadcom’s Tomahawk 5-nanometer switch chip and its Bailly switch designed for AI computer clusters.
Access to AI chips is vital for the Chinese company looking to make more powerful algorithms for its range of popular apps, including TikTok, the chatbot service Doubao, and the Chinese version of TikTok, Douyin.
Taiwan’s TSMC is not expected to begin manufacturing the new chip until later this year since the design work is still underway and the transition to the manufacturing stage has yet to begin.
