Science & Tech

China’s ByteDance and Broadcom are collaborating to create a cutting-edge AI chip.

According to two people familiar with the situation, China’s ByteDance is collaborating with American chip manufacturer Broadcom (AVGO) to create a cutting-edge artificial intelligence processor. This development could benefit TikTok’s owner in obtaining an adequate supply of high-end processors in the midst of tensions between the United States and China.

According to the sources, the 5-nanometer chip, sometimes referred to as an application-specific integrated chip (ASIC), would be manufactured by Taiwan’s TSMC (TSMC34.SA) and comply with US export regulations.

Since Washington imposed export limitations on cutting-edge semiconductors in 2022, no publicly publicized chip development cooperation between Chinese and US corporations have involved 5nm or higher advanced technologies. In this industry, U.S.-China transactions typically involve significantly less advanced technology.

China’s High-end chips

Because semiconductor concerns in China are sensitive, the sources declined to be named, but stated that ByteDance’s partnership with Broadcom, an established business partner, will help reduce procurement costs and provide a steady supply of higher-end chips.

However, they stated that TSMC is not anticipated to begin producing the newly developed chip this year. One of them mentioned that although the design process is moving along nicely, the “tapeout,” or the point at which the design phase ends and manufacture begins, has not yet begun.

Despite numerous efforts for comment, neither ByteDance nor Broadcom responded. TSMC opted not to respond.

ByteDance, like many other multinational IT companies, has made a significant push into generative artificial intelligence; but, compared to their international competitors, the Chinese company and its rivals face a significantly more constrained supply of AI chips.

China's ByteDance Forms New Division with an AI Applications Emphasis

NVIDIA

Because of U.S. export restrictions designed to obstruct China’s military’s advancements in artificial intelligence and supercomputing, Nvidia’s (NVDA) most sophisticated chipsets are unavailable. There is intense competition for both Chinese-specific U.S. processors as well as ones by rival Huawei, among of the rare Chinese manufacturers of AI accelerators.

Broadcom and ByteDance have collaborated on projects together at least since 2022. According to disclosures made public by Broadcom, the Chinese company has acquired the U.S. company’s Bailly switch for artificial intelligence computer clusters and its Tomahawk 5nm outstanding performance switch chip.

ByteDance needs to secure AI chips in order to boost the power of its algorithms. Apart from TikTok and Douyin, the Chinese counterpart of this short-video app, ByteDance has a number of well-known apps, such as Doubao, a chatbot service with 26 million users that resembles ChatGPT.

ByteDance has reportedly accumulated Nvidia processors to bolster its AI initiative, as per an individual who was informed about the situation.

The insider stated that ByteDance set aside $2 billion to buy Nvidia chips this past year. This includes A100 as well as H100 chips that were available before to the imposition of the first wave of U.S. sanctions as well as A800 as well as H800 chips which Nvidia produced for the Chinese market but were later banned.

Two other people with knowledge of the situation indicated that ByteDance also bought Huawei’s Ascend 910B CPUs last year.

Hundreds of jobs linked to semiconductors are now available on Bytedance’s website, with 15 of them being for ASIC chip designers.

One of the persons with intimate knowledge of the matter claims that it is additionally stealing highly skilled employees from additional Chinese AI chip companies.\

Nvidia Stock Drops from Record High

Nvidia (NVDA), a developer of artificial intelligence (AI) chips, is still in the headlines despite its shares falling from a record high set on Thursday and the announcement that it will be supplying Middle Eastern telecom behemoth Ooredoo with its technology.

After the stock’s explosive ascent this year amid the AI boom, investors may have taken advantage of a rare moment of widespread market weakness for profit-taking despite the lack of company-specific disclosures late last week.

Observe These Levels During This Bearish Engulfing Trend

Nvidia shares have risen strongly since establishing support near the moving average of fifty days in April of last year. Investors have viewed any declines as opportunities to purchase. But the intraday decline from its all-time high (ATH) on Thursday resulted in a bearish enveloping pattern, a candlestick shape that typically signals the possibility of a downside reversal, particularly following a significant price increase.

In the event that Nvidia’s price retraces this week due to a change in attitude, investors should monitor chart levels at $119 and $110, which are both places where the stock may find support following slight declines over the previous three weeks. The shares may return to a horizontal line at $97 that connects multiple previous record highs if these important areas are not held.

AI Technology Deal in the Middle East

Separately, Nvidia has signed an agreement to deploy its AI technology at data centers operated by Qatari multinational telecoms firm Ooredoo in five Middle Eastern nations, according to the CEO of the Doha-based company, in an interview with Reuters on Sunday.

ByteDance of China and Broadcom Collaborate to Develop Cutting-Edge AI Chips

Ooredoo said it would give its data centre customers across Oman, Maldives, Algeria, Tunisia,  Kuwait, as well as the Qatar access to Nvidia’s artificial intelligence and graphics processing capabilities, though it did not reveal the deal’s exact worth.

“Our business-to-business (B2B) clients, thanks to this agreement, will have access to services that probably their competitors (won’t) for another 18 to 24 months,” Aziz Aluthman Fakhroo, the CEO

In an effort to prevent China from obtaining cutting-edge AI technology via the Middle East, American officials have increased export restrictions on sophisticated American processors at the same time as the agreement.

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