ByteDance Ltd. and Broadcom Inc. have been in discussions regarding a potential collaboration on an artificial intelligence processor to support ByteDance’s development in that technology. The two companies have reportedly talked about a specially designed 5-nanometer chip, although no agreement has been reached as of yet. Broadcom currently supplies an older-generation 7nm AI processor for use in ByteDance’s data centers.
The proposed chip would be compliant with U.S. trade restrictions on China, according to Reuters. The commercial relationship between ByteDance and Broadcom mainly focuses on servers and networking equipment, with ByteDance being mentioned as a client in Broadcom’s press releases. In March, Broadcom announced that it had secured a new customer in its consumer AI accelerator business, with plans to deliver products to this customer in the near future, though the specific client was not named.
If a deal is finalized, the custom chip would be manufactured by Taiwan Semiconductor Manufacturing Co. The partnership between ByteDance and these semiconductor companies is seen as unusual due to current U.S. efforts to restrict China’s chipmaking capabilities. The goal of the collaboration is to secure a reliable supply of chips for ByteDance, particularly for its popular short video platform, as well as Chinese services Douyin and Toutiao. ByteDance’s Doubao chatbot has become China’s leading AI chatbot this year.
ByteDance’s global rivals, such as Meta Platforms Inc., Microsoft Corp., and Alphabet Inc.’s Google, are all working on or utilizing their own custom chips for AI tasks. With AI being a key focus for ByteDance this year, the company is looking to stay competitive with its U.S. counterparts.
Representatives for ByteDance, Broadcom, and TSMC did not provide comments on the potential collaboration. For more insights on leadership strategies, subscribe to the Fortune Next to Lead newsletter for free weekly advice on how to succeed in the corporate world.
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https://fortune.com/asia/2024/06/24/tiktok-owner-bytedance-talks-with-us-tech-firm-broadcom-about-tsmc-made-ai-chip/