According to a report from the USA tech media The Information, Chinese tech giant ByteDance, which is aggressively entering the AI market, plans to invest up to 7 billion USD in purchasing NVIDIA chips by 2025, and has informed suppliers of this plan.

This plan will be led by ByteDance's co-founder Zhang Yiming, who stepped down as CEO, and will make the company one of the largest consumers of such AI hardware globally. Zhang has recently been negotiating with datacenter operators in Southeast Asia and other overseas regions to ensure the availability of the next-generation NVIDIA Blackwell chips when they are launched next year.

In fact, three weeks ago, overseas financial media cited estimates from the global technology consulting firm Omdia, claiming that ByteDance has become the largest buyer of NVIDIA AI chips within China and even the largest customer in Asia.

The report analyzed publicly disclosed capital expenditure plans, server shipment volumes, and supply chain intelligence to estimate the orders for NVIDIA's popular Hopper GPUs commonly used in datacenter infrastructure as well as their top customers.

The estimates show that Microsoft ordered more NVIDIA Hopper chips in 2024 than other global tech companies, with a total expected to reach 0.485 million units. Following closely are ByteDance and Tencent, both Chinese companies, with order volumes of approximately 0.23 million units each.

In fourth place is another American company, 'Metaverse' Meta, which ordered 0.224 million chips, just half of Microsoft's order volume. The following major buyers include Tesla and xAI under Elon Musk, as well as Amazon and Google.

Based on numerous reports from the second half of this year, ByteDance seems to have ordered over 0.2 million NVIDIA H20 chips in 2024, and is accessing higher-end H100 and Blackwell chips by increasing overseas computing power.

For example, ByteDance is a major client of several Global Datacenter operators, which are planning to establish new datacenters in Southeast Asia and Europe to meet the strong demand for AI computing in the next decade.

Analysts generally believe that the substantial investment in AI Hardware indicates that ByteDance is seeking to establish a foothold in AI and maintain its lead. Reports suggest that Zhang Yiming has informed some suppliers that ByteDance's AI capital expenditure (hardware, land, and construction) plan for the next two years will exceed that of any other Chinese Technology giant.

According to a person involved in the discussions, Zhang Yiming has stated that he will personally oversee projects related to leasing or constructing AI datacenters, while ensuring that the company has sufficient computing capacity to train and run its AI models. However, a spokesperson for ByteDance indicated that some information in the aforementioned The Information article is 'incorrect,' and NVIDIA declined to comment.

The reports also cited informed sources stating that ByteDance has informed some datacenter suppliers and Banks that it expects to spend over $20 billion on AI Chips, datacenters, and other Hardware (such as submarine cables) by 2025, with nearly $7 billion budgeted for overseas Cloud Computing Services, allowing the company to utilize NVIDIA's AI Chips.

On December 19, The Paper learned from informed sources that after stepping down as CEO, Zhang Yiming shifted his focus to the strategy and research of large models and ventured into private equity. He is directly responsible for recruiting AI talent from competitor companies in China and has repeatedly emphasized the pursuit of the goal of 'Artificial General Intelligence' (AGI) internally. ByteDance insiders indicate that Zhang Yiming is extremely focused on achieving AGI.

Last week, HAITONG SEC pointed out that the number of ByteDance's AI users has surged, with Doubao becoming the first AI application in the country to surpass 100 million users in September this year. In November, Doubao has already surpassed ChatGPT in DAU and growth rate. Therefore, it is suggested to pay attention to domestic computing power investment opportunities, as domestic downstream capital expenditures are entering an AI acceleration phase, with capital expenditures expected to further accelerate by 2025. The performance of companies in the Industry Chain has already shown a turning point.

Zheshang also statedthat the dawn of domestic computing power demand has arrived, and ByteDance's R&D investment is approaching the sum of BAT. ByteDance has invested heavily in AI, with capital expenditures reaching 80 billion yuan in 2024, close to the sum of Baidu, Alibaba, and Tencent (around 100 billion yuan). R&D investment is significantly ahead of peers, akin to Microsoft's increased investment in OpenAI, ByteDance in China may be comparable to OpenAI in the USA.

Minsheng Securities stated in a Research Report on December 16 that the rapid growth in Doubao users will drive demand for AI Servers. The expansion of computing centers brings not only Infrastructure demand but also an increased need for Thermal Management, with ByteDance's AI end liquid cooling expected to tap into a vast market.

On December 30, Monday, while major US stock market Indices fell over 1%, NVIDIA went against the trend and rose.

However, some analyses suggest that NVIDIA should be wary of trends where major clients like Amazon, Meta, and Google develop their own chips to reduce dependency on it. ByteDance is reportedly also developing machine learning AI Chips based on Google's Tensor Processing Unit (TPU) model.

Editor/ping