ByteDance Exploits Loophole to Spend Billions on Restricted Nvidia Chips
TikTok parent ByteDance plans to spend $7 billion on Nvidia chips in 2025 by storing them in overseas data centers, bypassing U.S. export restrictions aimed at China.
ByteDance plans to spend $7 billion on Nvidia chips in 2025, a move that makes the TikTok parent company one of the world's top owners of these AI components despite strict U.S. export restrictions. The U.S. government implements these rules to prevent Chinese companies from acquiring advanced American AI technology, tightening these controls multiple times since 2022.
To bypass these limitations, ByteDance uses a legal loophole where it stores the purchased chips in data centers located outside of China, such as in Southeast Asia. This strategy technically complies with U.S. laws because the hardware does not enter Chinese borders, even though ByteDance uses these computing resources to power its Chinese AI chatbot, Doubao.
ByteDance officially denies any wrongdoing and insists it follows all applicable export control rules, specifically stating it has not purchased H100 chips for non-U.S. data centers since the restrictions took effect. However, this massive procurement plan highlights the ongoing challenges U.S. regulators face in effectively controlling the global distribution of advanced semiconductor technology.