US trade restrictions have created significant obstacles for Chinese companies, limiting their access to the advanced artificial intelligence hardware needed to remain competitive globally.
Nvidia's H20 GPUs, scaled-down versions of the powerful H100, were developed to meet export control requirements, but still carry a hefty price tag of around $10,000 per unit.
Even at that price, the availability of these GPUs is limited, compounding the difficulties faced by Chinese companies. This shortage has fueled a thriving black market for Nvidia's high-end chips, such as the H100 and A100, where prices continue to rise due to overwhelming demand. However, global companies, particularly ByteDance – the parent company of TikTok, which is already under intense scrutiny in the United States – cannot afford the legal and reputational risks associated with participating in such illicit markets.
Two AI chips
ByteDance has made significant investments in artificial intelligence, reportedly spending more than $2 billion on Nvidia's H20 GPUs in 2024, and now, according to The informationthe company is looking to develop its own AI GPUs to reduce dependence on Nvidia.
The report adds that these chips will include one designed for AI training and another for AI inference, and both will be produced using TSMC's advanced N4/N5 process, the same technology used for Nvidia's Blackwell GPUs.
Broadcom, known for its AI chip designs for Google, will lead the development of these GPUs, which are expected to enter mass production in 2026. While several Chinese companies have developed their own AI GPUs to reduce dependence on Nvidia , most still rely on Nvidia hardware for more demanding tasks. It remains to be seen if ByteDance can fully transition to its own hardware, and if it would like to do so.
The move certainly will not be without challenges. As Tom Hardware notes: “The company now relies on Nvidia's CUDA and supporting software stack for AI training and inference. “Once you opt for your AI GPUs, you need to develop your software platform and ensure that your software stack is fully compatible with your hardware.”
