ByteDance Builds AI Cluster Abroad
Even as ByteDance relinquishes control of TikTok in the US, it's doubling down on AI with a $2.5 billion computing cluster outside China. They're reportedly deploying top Nvidia chips in Malaysia and elsewhere, skirting US export controls. This raises questions about whether tech sanctions can really contain China's AI ambitions.
ByteDance is reportedly partnering with Southeast Asian cloud firm Aolani Cloud to install roughly 500 Nvidia Blackwell systems in Malaysia, potentially including 36,000 B200 AI chips. The project could cost upwards of $2.5 billion and will be used for AI research and development outside of China, as well as to serve the growing global demand for ByteDance's AI services. This move allows ByteDance to continue utilizing top-tier hardware while navigating tight U.S. limits on advanced AI chips for Chinese companies. This isn't ByteDance's first foray into Southeast Asia for AI infrastructure. In 2024, the company announced plans to invest around $2.13 billion to establish Malaysia as an AI hub, including an additional $320 million to expand data center facilities in Johor state. Minister Tengku Datuk Seri Zafrul Abdul Aziz expects these investments to help grow Malaysia's digital economy to 22.6% of its GDP by 2025. However, ByteDance also faces challenges, including potential copyright complaints against its Seedance 2.0 AI video model and compute capacity limitations. The company may need to throttle access, invest further in infrastructure, or shift to less resource-intensive applications. Furthermore, China is pushing companies to adopt homegrown processors and reduce reliance on U.S. technology.
