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ByteDance Plans New AI Model Trained With Huawei Chips

The ByteDance logo is seen at the company's office in Shanghai, China, July 4, 2023. REUTERS/Aly Song/File Photo
The ByteDance logo is seen at the company's office in Shanghai, China, July 4, 2023. REUTERS/Aly Song/File Photo
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ByteDance Plans New AI Model Trained With Huawei Chips

The ByteDance logo is seen at the company's office in Shanghai, China, July 4, 2023. REUTERS/Aly Song/File Photo
The ByteDance logo is seen at the company's office in Shanghai, China, July 4, 2023. REUTERS/Aly Song/File Photo

TikTok's Chinese parent ByteDance plans to develop an AI model trained primarily with chips from compatriot Huawei Technologies, said three people familiar with the matter, as US curbs turn the social media giant homeward in search of chips.
ByteDance has diversified to domestic suppliers of chips used in artificial intelligence and accelerated development of its own since the US in 2022 started restricting exports of advanced AI chips such as from market leader Nvidia, Reuters said.
AI has become central to the technology industry with firms in sectors as varied as gaming and e-commerce differentiating offerings through the integration of custom AI models - programs that employ pattern recognition to make decisions.
ByteDance's next step in the AI race is to use Huawei's Ascend 910B chip to train a large-language AI model, said the people, declining to be identified as the plan is confidential.
A fourth person also said ByteDance is planning a new AI model but could not say whether it will use Huawei chips.
ByteDance already uses the Ascend 910B primarily for less computationally intensive inference tasks, which involve pre-trained AI models making predictions, the three people and a separate source said.
Training AI models is far more demanding and requires huge amounts of data, necessitating the use of ultra-high-performance chips such as Nvidia's premium graphics processing units.
The new model's capability and complexity, measured by its computing parameters, will be less powerful than ByteDance's existing AI model Doubao, one of the people said.
ByteDance did not reply to a request for comment. Michael Hughes, a TikTok spokesman in Washington D.C., said, speaking on behalf of ByteDance, "The entire premise here is wrong. No new model is being developed".
Huawei did not reply to Reuters' requests for comment.
TIGHT SUPPLY
ByteDance has ordered more than 100,000 Ascend 910B chips this year but has received fewer than 30,000 as of July, a pace too slow to meet company needs, one of the people said.
The constrained supply and limited computing power versus Nvidia's China-available chips have prevented ByteDance from setting a timeline for the new model, two of the people said.
ByteDance's current AI technology is used in its flagship large-language model launched in August 2023 and rebranded as chatbot Doubao, and in many other applications including a text-to-video tool Jimeng. It introduced two video-focused Doubao models this month to compete with OpenAI.
Use of such applications has ballooned since early this year, with ByteDance's chatbot becoming one of China's most popular apps with more than 10 million monthly active users.
The increased emphasis on AI has made ByteDance one of the largest buyers of Huawei's AI chips, the three people said.
It is also the biggest buyer of Nvidia's H20 AI chip, which the U.S. chipmaker tailored for the China market in response to trade restrictions, said two of the people. The TikTok owner is also Microsoft's biggest client in Asia for Nvidia chips accessible via cloud computing, said two separate sources.
Reuters previously reported that ByteDance allocated $2 billion for Nvidia chips last year.
Nvidia declined to comment. Microsoft did not reply to a request for comment.

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Latest US Strike on China's Chips Hits Semiconductor Toolmakers

Flags of China and US are displayed on a printed circuit board with semiconductor chips, in this illustration picture taken February 17, 2023. REUTERS/Florence Lo/Illustration/File Photo
Flags of China and US are displayed on a printed circuit board with semiconductor chips, in this illustration picture taken February 17, 2023. REUTERS/Florence Lo/Illustration/File Photo
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Latest US Strike on China's Chips Hits Semiconductor Toolmakers

Flags of China and US are displayed on a printed circuit board with semiconductor chips, in this illustration picture taken February 17, 2023. REUTERS/Florence Lo/Illustration/File Photo
Flags of China and US are displayed on a printed circuit board with semiconductor chips, in this illustration picture taken February 17, 2023. REUTERS/Florence Lo/Illustration/File Photo

The United States on Monday launched its third crackdown in three years on China's semiconductor industry, curbing exports to 140 companies including chip equipment maker Naura Technology Group, among other moves.

The effort to hobble Beijing's chipmaking ambitions also hits Chinese chip toolmakers Piotech and SiCarrier Technology with new export restrictions as part of the package, which also takes aim at shipments of advanced memory chips and more chipmaking tools to China.

The move is one of the Biden administration's last large-scale efforts to stymie China's ability to access and produce chips that can help advance artificial intelligence for military applications, or otherwise threaten US national security.

It comes just weeks before the swearing-in of Republican former president Donald Trump, who is expected to retain many of Biden's tough-on-China measures, according to Reuters.

The package includes curbs on China-bound shipments of high bandwidth memory (HBM) chips, critical for high-end applications like AI training; new curbs on 24 additional chipmaking tools and three software tools; and new export curbs on chipmaking equipment made in countries such as Singapore and Malaysia.

Commerce Secretary Gina Raimondo said the action aims to prevent "China from advancing its domestic semiconductor manufacturing system, which it will use to support its military modernization."

Reuters first reported many companies involved and key details of the plan.

The tool controls will likely hurt Lam Research, KLA and Applied Materials, as well as non-US companies like Dutch equipment maker ASM International .

Among Chinese companies facing new restrictions are nearly two dozen semiconductor companies, two investment companies and over 100 chipmaking tool makers.

The companies include Swaysure Technology Co, SiEn Qingdao, and Shenzhen Pensun Technology Co, work with China's Huawei Technologies, the telecommunications equipment leader once hobbled by US sanctions and now at the center of China's advanced chip production and development.

They will be added to the entity list, which bars US suppliers from shipping to them without first receiving a special license.

Asked about the US curbs, Chinese foreign ministry spokesman Lin Jian said such behaviour undermined the international economic trade order and disrupted global supply chains.

China will take measures to safeguard the rights and interests of its firms, he added at a regular press briefing on Monday.

The Chinese commerce ministry did not immediately respond to a request for comment.

China has stepped up its drive to become self-sufficient in the semiconductor sector in recent years, as the US and other countries have restricted exports of the advanced chips and the tools to make them. However, it remains years behind chip industry leaders like Nvidia in AI chips and chip equipment maker ASML in the Netherlands.

The US also is poised to place additional restrictions on Semiconductor Manufacturing International, China's largest contract chip manufacturer, which was placed on the Entity List in 2020 but with a policy that allowed billions of dollars worth of licenses to ship goods to it to be granted.

For the first time, the US will add three companies that make investments in chips to the entity list. Chinese private equity firm Wise Road Capital, tech firm Wingtech Technology Co and JAC Capital because of their role "in aiding China’s government’s efforts to acquire entities with sensitive semiconductor manufacturing capability critical to the defense industrial bases of the United States and its allies with the objective of relocating these entities to China."

Companies seeking licenses to ship to firms on the Entity List generally get denied.

DUTCH AND JAPANESE EXEMPTED

An aspect of the new package that addresses the foreign direct product rule could hurt some US allies by limiting what their companies can ship to China.

The new rule will expand US powers to curb exports of chipmaking equipment by US, Japanese, and Dutch manufacturers made in other parts of the world to certain chip plants in China.

Equipment made in Israel, Malaysia, Singapore, South Korea and Taiwan is subject to the rule while Japan and the Netherlands will be exempt.

The expanded foreign direct product rule will apply to 16 companies on the entity list that are seen as the most important to China's most advanced chipmaking ambitions. The rule will also lower to zero the amount of US content that determines when certain foreign items are subject to US control. That will allow the US to regulate any item shipped to China from overseas if it contains any US chips.

The new rules are being released after lengthy discussions with Japan and the Netherlands, which, along with the United States, dominate the production of advanced chipmaking equipment.

The United States plans to exempt countries that adopt similar controls, the people said.

Another rule in the package restricts memory used in AI chips that correspond with what is known as "HBM 2" and higher, technology made by South Korea's Samsung and SK Hynix and US-based Micron.

Industry sources expect only Samsung Electronics to be affected. Analysts estimate Samsung generates about 30% of its HBM chip sales from China.

The latest rules are the third major package of chip-related export curbs on China adopted under the Biden administration.

In October 2022, the United States published a sweeping set of controls on sale and manufacture of certain high-end chips that was considered to be the biggest shift in its tech policy toward China since the 1990s.