Chinese regulators have banned TikTok-owner ByteDance from using semiconductors made by American chip design giant Nvidia at its new data centres, according to a report by The Information.
The report, citing two company employees, comes at a time when China is increasingly restricting its technology giants from purchasing chips made by Nvidia.
The Chinese government has issued guidance requiring new data centre projects that have received any state funds to only use domestically-made artificial intelligence chips.
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China has previously said Nvidia’s chip may pose national security concerns — concerns that the world’s most valuable firm has dismissed. But Beijing’s move is also likely driven by a larger ambition to cut the world’s second-biggest economy’s reliance on foreign technology.
Chinese technology giants are, meanwhile, forced to use domestically-made chips, which are yet to match up in performance even to Nvidia’s less advanced chips. Tech giants such as ByteDance have previously indicated they need Nvidia chips.
Furthermore, firms like ByteDance – and Alibaba – have also been training their artificial intelligence models in Southeast Asian data centres, to gain access to Nvidia’s advanced chips, according to a report this week by the Financial Times.
Still, a potential blocking of ByteDance from buying from Nvidia could have a significant impact on both ByteDance and Nvidia. ByteDance bought more Nvidia chips than any other Chinese firm in 2025, as it raced to secure computing power for its billion-plus users amid concerns Washington could curb supply, according to The Information’s report.
The move will also be in line with an August diktat from Chinese regulators telling local firms to halt new orders of Nvidia AI chips.
Speaking about the reported block on Bytedance, an Nvidia spokesperson told Reuters: “The regulatory landscape does not allow us to offer a competitive data centre GPU in China, leaving that massive market to our rapidly growing foreign competitors.”
Training abroad
China is accelerating plans to build an alternative AI ecosystem and achieve chip self-sufficiency, even as trade tensions with Washington remain in a fragile pause.
Washington has barred sales of Nvidia’s most advanced chips to China, allowing only scaled-down versions such as the H20. Nvidia had introduced a China-specific chip, the RTX6000D, but demand has been tepid, with some major tech firms opting not to place orders.
Meanwhile, US President Donald Trump said earlier this month after talks with Chinese President Xi Jinping that Washington would “let them deal with Nvidia but not in terms of the most advanced” chips.
It remains to be seen, however, whether Washington will move to restrict Chinese tech firms from training their AI models on Nvidia chips offshore.
According to the FT report, there has been a steady increase in training in offshore locations after the US moved to restrict sales of the H20 chip in April.
Chinese companies rely on lease agreements for overseas data centres owned and operated by non-Chinese entities, the newspaper said, noting that DeepSeek, which gathered a large stock of Nvidia chips before the US export bans, was an exception, with its model being trained domestically.
Deepseek is also collaborating with domestic chip manufacturers led by Huawei, to optimise and develop the next generation of Chinese AI chips, FT added.
- Reuters, with additional editing by Vishakha Saxena
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