ByteDance in talks to buy AI chips from Chinese suppliers

Nvidia ↘ 1.39% has begun pitching its new Vera central processing unit to Chinese clients, telling them the chip could be available as early as August with orders open now, according to a Reuters report citing three people familiar with the matter. The move marks a strategic pivot for the world's most valuable chipmaker as it seeks to rebuild revenue in China after U.S. export controls stalled shipments of its most powerful GPUs.reuters

A CPU Side Door Into China

The Vera chip, an Arm-based 88-core processor designed for agentic AI workloads, is not subject to the same U.S. export restrictions that apply to GPUs. Nvidia unveiled the chip as part of its Vera Rubin architecture during a keynote at Computex in Taiwan on June 1. Now in full production, the company claims Vera runs up to 1.8 times faster than comparable processors from rivals such as AMD Advanced Micro Devices, Inc. ↘ 4.26% and Intel ↘ 5.25%.economictimes+3

A single Vera processor will cost "well north" of $20,000 before bulk discounts, and a fully configured rack of 256 chips would run to approximately $10 million, according to semiconductor research firm SemiAnalysis. Reuters reported that a major Chinese cloud provider plans to order more than 300 servers, each with two Vera CPUs, for preliminary testing. Chinese clients intend to initially deploy Vera chips only in their overseas data centers for testing, one source said.finance.yahoo+2

ByteDance Turns to Domestic Alternatives

The Vera push comes as Chinese tech firms accelerate efforts to reduce their dependence on Nvidia. ByteDance is in talks with Shanghai-based Iluvatar CoreX to purchase at least 50,000 AI chips this year, primarily for inference workloads powering its Doubao chatbot, Reuters reported on Sunday. The TikTok parent is also exploring a deal for Baidu's ↘ 3.93% Kunlunxin chips, according to two people familiar with the discussions.reuters+2

If finalized, Iluvatar CoreX would become ByteDance's third major domestic GPU supplier, joining Huawei and Cambricon. The deals remain under negotiation and terms could still change.finance.yahoo+2

Competitive Pressure Mounts

Nvidia's China revenue has been under pressure since the U.S. Commerce Department tightened enforcement of export controls, including new guidance targeting Chinese-headquartered firms operating overseas subsidiaries. The Vera CPU strategy represents a potential workaround, but faces competition from a growing Chinese chip ecosystem eager to fill the gap left by restricted GPU sales.dailymotion