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The Tech Basic > News > ByteDance Refutes In-House AI Chip Claims, Stays with NVIDIA for Now
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ByteDance Refutes In-House AI Chip Claims, Stays with NVIDIA for Now

Evelyn Blake
Last updated: 20 September 2024 21:06
Evelyn Blake
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In a recent development, ByteDance, the parent company of TikTok, has refuted rumors claiming it is working on developing its own AI chips. The tech giant reportedly has no immediate plans to replace NVIDIA’s high-performance AI chips. According to WCCF Tech, ByteDance was rumored to have engaged Taiwan’s TSMC to develop two custom AI semiconductors. These chips would supposedly reduce the company’s dependence on NVIDIA, which has been ByteDance’s primary supplier of AI accelerators, to the tune of $2 billion in purchases this year alone.

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Long-Term Semiconductor Independence?Focus on Cost Optimization

However, a new report by the South China Morning Post (SCMP) clarifies that ByteDance has denied these claims. The company, according to the report, states that its current focus is on optimizing costs for various business sectors, including advertising and recommendation algorithms. This effectively quashes speculation about an imminent move away from NVIDIA, despite ByteDance’s long-term semiconductor goals remaining intact.

Long-Term Semiconductor Independence?

ByteDance, like other tech giants such as Google, Amazon, and Microsoft, is under increasing pressure to explore in-house AI chip solutions. The unprecedented demand for AI technology has led to longer waiting times for NVIDIA’s coveted AI accelerators. Therefore, it would make strategic sense for companies to create their own semiconductor portfolios in order to reduce reliance on third-party suppliers and improve efficiency in AI inferencing and training.

Rumors suggested ByteDance was developing two distinct AI chips using TSMC’s 5nm process. These chips were expected to target AI applications, including inferencing and training, putting them on par with NVIDIA’s Hopper generation in terms of raw computational power. However, the development of in-house AI chips is a complex process, requiring not only powerful hardware but also software stacks capable of supporting advanced AI models.

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Focus on Cost Optimization

ByteDance has specifically downplayed the claim that it is actively developing its proprietary AI chip, even as it did not dismiss its long-term interest in semiconductors. For now, ByteDance’s efforts are being directed towards cost control in its core operations such as advertising, recommendations, and more importantly, other artificial intelligence activities. This signals that the firm may very well be approaching the idea of semiconductor independence rather tactfully. For now, however, ByteDance appears to be in no hurry to “dump” NVIDIA, but the semiconductor strategy is still a long-term vision.

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Evelyn Blake
By Evelyn Blake
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Evelyn Blake is an investor in technology and journalist who has been in the nascent space since 2014. Her love and passion for technological innovations made her delve deeper into the world of technology evolution. As a journalist, Evelyn has been covering latest trends and emerging gadgetries. She is a philanthropist and human rights activist.

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