Even as the US has banned the sale of Nvidia’s most advanced AI chips to China, trying to keep them out of Chinese companies’ hands, TikTok-parent ByteDance has reportedly have found a way around that. According to a report by The Wall Street Journal, the internet giant is quietly assembling a massive network of high-end Nvidia AI chips that it cannot legally buy directly due to US export controls.The company is said to be striking partnerships with cloud computing companies and data centres based outside China’s borders. At the centre of the arrangement is a little-known Southeast Asian company called Aolani Cloud, the report said.
How ByteDance is getting access to Nvidia’s top-tier chips
Citing people familiar with the matter, the WSJ reports that ByteDance is working with Aolani on plans to deploy around 500 Blackwell computing systems – currently the top-tier AI processors offered by Nvidia – in Malaysia. These systems will comprise approximately 36,000 of Nvidia’s most advanced B200 chips. If fully completed, the hardware involved would likely cost more than $2.5 billion.
The chips are reportedly being assembled into servers by a company called Aivres, which Aolani is purchasing them from. The computing power will then be leased to ByteDance for AI research and development as well as to serve the growing global demand for ByteDance’s AI products.Under this arrangement, ByteDance will not own the chips – Aolani does. It is based outside China and operates in Malaysia, which means that the setup appears to operate in a legal grey area rather than in direct violation of existing restrictions.According to the report, Aolani is a tier-1 cloud partner of Nvidia, meaning it has been certified by the American chipmaker for priority access to its latest hardware. An Nvidia spokesman told the publication that said the company’s compliance team clears all cloud partners before selling chips to them, and that “by design, the export rules allow clouds to be built and operated outside controlled countries” like China.Aolani has said it works with a US law firm to ensure compliance, and its spokesman stated that the company “adheres fully to all applicable export control regulations”.Beyond the Malaysia arrangement, ByteDance has also been reported to be in talks to use AI servers containing more than 7,000 B200 chips at a data centre in Indonesia.
Chinese companies striking deals to rent Nvidia chips
This is not the first time that reports have surfaced about Chinese companies looking for intermediaries for renting the computing power to Chinese tech firms that cannot access it directly. Malaysia, Indonesia, Singapore, South Korea, Australia, and parts of Europe have all become attractive locations for this kind of arrangement.ByteDance has become of the fastest growing AI companies and it already operates five of the world’s 50 most popular AI consumer apps by monthly active users, as per a January ranking by venture capital firm Andreessen Horowitz. The company’s AI portfolio includes Dola, a chatbot; Dreamina, a video creation tool; and Gauth, a homework assistant. Its most recent standout product is Seedance, an AI video generation model that has drawn attention for its ability to turn written script prompts into realistic short film scenes.
