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ByteDance Team to Develop AI Chips as China Aims For Self-Reliance

Maybe a divided world of parallel tech economies isn’t so far off.
(Gorodenkoff)
(Gorodenkoff)
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ByteDance, the Chinese company that owns TikTok, is planning to start developing its own semiconductors, Reuters reports.

Why It Matters: “Chinese technology giants are stepping up efforts to design their own chips in a sign of China’s ambitions to reduce its dependence on foreign producers such as Qualcomm Inc and Nvidia Corp.”

  • It’s also important to mention the tense relationship with the U.S., which put sanctions on Huawei and crippled the Chinese telecom giant by blocking its ability to source chips.
  • China is the world’s biggest buyer of semiconductors, but it can’t make them as well as Japan, South Korea or the U.S.

Numbers To Consider (per ICInsights):

  1. $143 Billion in chips were sold in China during 2020.
  2. $22.7 Billion were produced in China.
  3. $8.3 Billion were produced by Chinese-headquarter firms.

Bytedance isn’t the only one trying. Chinese search engine Baidu just raised funding for its “Kunlun AI chip unit,” which has an estimated value of $2 billion. Alibaba “unveiled an AI chip for its cloud computing products in late 2019.” Chinese AI unicorn SenseTime is now working on its own chips after landing on a U.S. trade list in 2019.

The Outlook: The plan is still in its early stages and is taking a hard look at how Arm builds its server-side chips. ByteDance has posted a series of semiconductor-related job opportunities on its website and previously told Chinese business magazine Caijing that it “has established a team to explore the development of artificial intelligence chips.”

Justin Oh:

Another step forward in the China vs U.S. Technological Cold War

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