ByteDance in AI chip development talks with Samsung

ByteDance, TikTok’s parent company, is in advanced talks with Samsung Electronics to produce an artificial intelligence (AI) chip that aims to meet the growing demands of its AI workloads. The goal is for ByteDance to secure a steady supply of advanced processors as it seeks to expand its operations into short video, e-commerce, and enterprise cloud services.

Two people familiar with the matter state that ByteDance is aiming to receive sample chips by March’s end. The company plans to produce at least 100,000 units this year for AI inference tasks, they say. One of these sources indicated that production could be ramped up to as many as 350,000 units.

Negotiations with Samsung are centered around providing ByteDance access to its memory chip supplies, which are currently in exceptional short supply due to the burgeoning demand for AI infrastructure across the globe. This deal is particularly attractive given the scarcity of resources and is a strategic move aimed at reducing dependency on current suppliers like Nvidia.

However, a spokesperson for ByteDance clarified that the company has no plans to develop its own chips. “We do not have any plans to create our own chip,” the statement from ByteDance’s spokesperson read. The company does not elaborate further on this clarification but maintains its commitment to AI development and investment.

While ByteDance is yet to launch its proprietary AI chips, competitors like Alibaba and Baidu are already leading in this area. Alibaba unveiled Zhenwu, an AI chip for large-scale applications last month, and Baidu has plans to list its Kunlunxin unit soon. These developments underline the urgency among Chinese tech companies to develop their own AI capabilities amid US export restrictions.

ByteDance’s efforts also extend beyond just manufacturing chips; they encompass developing AI models and promoting their practical uses across various sectors. The company founded Seed in 2023 specifically for AI model development, with Zhao Qi, overseeing ByteDance’s chatbot Dola, emphasizing the importance of continued investment in this area.

This year, ByteDance aims to allocate over $22 billion towards its AI-related procurement efforts, with nearly half of that budget earmarked for Nvidia’s H200 models. The company is also investing heavily into enhancing its internal chip development, including SeedChip, a project named after the codename used internally.

ByteDance executive Zhao Qi, who leads the company’s chatbot initiatives, assured employees at an all-hands meeting in January that their AI investments would benefit every division of ByteDance. The commitment to AI advancement remains strong despite acknowledging that current models lag behind global leaders like OpenAI.

As ByteDance pushes forward with its plans for internal chip development and broader AI investment, the company seeks to secure a stable supply of advanced processors by collaborating with Samsung Electronics. This collaboration could be pivotal in shaping future strategies within the tech industry, as China’s leading companies look to reduce their dependence on external suppliers like Nvidia.