ByteDance has decided that Intel and AMD are too expensive. So you’re going to make your own CPUs

ByteDance, TikTok’s parent company, has been purchasing the processors it needs for its data centers from Intel and AMD for many years. He’s going to stop doing it. And this Chinese company has decided that this model has just come to an end. According to Reutersis already developing its own processors with the purpose of supporting its infrastructure. artificial intelligence (IA) in response to a combination of supply shortages and price increases that have made dependence on external suppliers unsustainable.

The increases are not marginal: Intel and AMD have raised their rates between 10% and 35% quarter by quarter in recent months, a pressure that is difficult to bear for a company that plans to invest around $22.8 billion in AI infrastructure during 2026. However, the underlying trigger is not only the price. The industry is experiencing a structural change in the way AI is used because it has left behind the phase of mass training of models dominated by Nvidia GPUs to enter into the age of inference.

That type of workload demands much more from the CPUs, which work in tandem with the GPUs and have become the new bottleneck of AI. The most immediate consequence of this scenario is a shortage of processors that Intel and AMD are not able to meet. In fact, the company led by Lip-Bu Tan has warned its Chinese customers, again according to Reutersthat their delivery times are going to be extended up to six months. And Lisa Su, the CEO of AMD, has declared that the global CPU market is stressed and the situation is not going to improve in the short term.

ByteDance has two weapons: Arm and RISC-V

The strategy that ByteDance has developed involves developing two architectures in parallel: one based on Arm and another on RISC-V, the open source standard that China has embraced with great interest precisely because of its independence from Western licenses. Designing two variants simultaneously is not at all a symptom of indecision: it responds to the usual coverage of large technology companies before committing to large-scale production of a specific proposal.

ByteDance has been hiring talent specialized in chips since 2022. In 2024 it partnered with Broadcom to design a custom AI accelerator and manufacture it using TSMC’s 5nm lithography, known as the SeedChip. Its mass production is planned for this year. However, the CPU it is developing is a different piece of the puzzle: a general-purpose processor for servers and not a specialized accelerator. Even so, both initiatives point in the same direction: they pursue reduce dependence on external suppliers in a context in which US export restrictions and market volatility make this dependence increasingly costly.

This moment is also relevant because of what is happening at the other end of the market. Nvidia has built its dominance on GPUs, but is now entering the CPU market with your Vera processors with the intention of capturing an additional $200 billion market. In March it also presented an inference system developed with Groq technology in a clear attempt to consolidate its positions before the fragmentation of the AI ​​chip market reduces its share. Be that as it may, ByteDance for the moment continues to depend on Nvidia for its GPUs, although it is already playing on that same board with its own cards.

Image | Intel

More information | Reuters

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