like the waters They are very upset about AI chipsTikTok’s parent company has come up with a strategy to circumvent US export restrictions for NVIDIA chips: instead of importing the chips, it uses them where they are allowed. And that place is Malaysia.
chip war. From 2022, US export regulations They prohibit NVIDIA from selling their accelerators of most advanced artificial intelligence directly to China. This puts the large Chinese technology companies at a disadvantage, as they see how their American rivals (Google, OpenAI, Microsoft, Anthropic, etc.) have unrestricted access to the most advanced computing power they obtain from NVIDIA. ByteDance, the company behind TikTok, does not want to be left behind in the global AI race and has found a legal, albeit controversial, path forward.
What exactly happened. According to account According to the Wall Street Journal, ByteDance is working with a Southeast Asia-based company called Aolani Cloud to deploy a cluster of about 500 computing systems in Malaysia. NVIDIA Blackwellwhich is equivalent to approximately 36,000 chips B200. The estimated cost of the entire infrastructure exceeds $2.5 billion.
Just like account In the middle, the servers are assembled by Aivres, a company specialized in building hardware with NVIDIA chips. Aolani, created at the end of 2023 under a holding structure in the Cayman Islands and with capital from Singapore venture capital firms, had already been renting servers from ByteDance with H100 chips in Malaysia since February.
The legal key to the matter. ByteDance is not buying the chips or servers: it rents them. Aolani is the one who physically owns and operates them in Malaysia, a country that does not fall under US export restrictions. Under current rules, what is regulated is the destination of the hardware, not who uses it in the cloud. “By design, export rules allow clouds to be built and operated outside restricted countries,” counted an NVIDIA spokesperson told the WSJ. It also added that all customers who use NVIDIA chips undergo internal compliance reviews before receiving their products.
On the other hand, the medium points out That ByteDance is not on any list of restricted companies from the US Department of Commerce, so the fact that they are using this hardware does not trigger any alerts at the moment.
Qgeopolitical tension. Just because all this is legal does not mean it is politically convenient. Aolani recognized in an internal presentation to investors that it is working with a US law firm to ensure its regulatory compliance, and that it is already considering future regulatory changes that “would likely be prospective, not retroactive.” A phrase that, read in a political key, leaves some real uncertainty about whether Washington may end up limiting this type of business structures in the future.
Last month, from Reuters they shared that the US would be willing to allow ByteDance to buy H200 chips from NVIDIA, although the semiconductor manufacturer would not have yet accepted the proposed conditions.
Bytedance and its ambition in AI. ByteDance already operates five of the world’s 50 most popular consumer AI apps by monthly active users, according to data by Andreessen Horowitz. They have their chatbot Dolathe platform to generate video with AI Dreamina and Gauthan educational assistant. In terms of video generation, Bytedance went extremely viral with Seedanceits engine for generating videos with AI that has left half the planet crazy for its realism and precision when constructing pieces of text in video clips.
The company has research teams in Singapore, San Jose and Seattle, and seeks to fill more than a hundred AI vacancies in the US. “Our goal is to reach the highest peak,” said its CEO, Liang Rubo.
Cover image | Collabstr and NVIDIA
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