ByteDance wants to secure application-specific integrated circuits (ASICs) chips tailored to a single customer’s computing needs, although Bloomberg has reported that the order volume is still undecided, with an agreement not reached yet. An agreement would make ByteDance MediaTek’s second major ASIC customer after Google, if talks are completed. US export restrictions have led ByteDance to look at alternatives to Nvidia’s advanced AI chips. Companies such as ByteDance, Alibaba and Tencent are currently unable to acquire Nvidia’s most powerful processors, and domestic suppliers such as Huawei have struggled to meet demand.

ByteDance still yet to decide on order volume

Quartz reported that US rules still allow Chinese companies to work directly with chip designers, though, as long as the computing power they acquire stays below a specified threshold. ByteDance has taken advantage of this approach, agreeing in May to purchase millions of ASICs from Qualcomm for its AI data centers.

The Taiwanese chipmaker is using its mobile processor expertise to expand into data center infrastructure, and a deal of this level would strengthen its foothold and position in a market that has been largely dominated by Qualcomm and Broadcom. Securing a major customer such as ByteDance could even help to further speed up the transition into data center infrastructure.

MediaTek expects AI chip sales to reach about $2 billion this year and is targeting a 15% share of an $80 billion market by 2027, Bloomberg reported. Its ambitions received a further boost in September, when Nvidia announced a $3.5 billion investment in the company, done via convertible bonds. The deal also gave MediaTek access to Nvidia’s NVLink Fusion platform for developing custom accelerator chips, Quartz reported. With a market value of about $210 billion, MediaTek is Taiwan’s second-largest company by market value, well behind TSMC.

ByteDance’s larger spending interests have led it to consider capital expenditure of up to $70 billion this year, more than double its spending in the previous year, with outlays potentially approaching $100 billion in 2027 if conditions remain favourable, Bloomberg reported. In September, ByteDance secured a $30 billion loan to help in the financing of this expansion. ByteDance’s AI strategy is based on flagship models such as Seedance, which compete with other products such as Alibaba’s Happy Horse, Kuaishou’s Kling AI and Google’s offerings.

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With the latest development, it pushes the company past its $20 billion target to about $30 billion. Citigroup and JPMorgan coordinated the loan deal, which carries a three-year term and an option to run to five years. The deal is still not finalized, with banks still confirming their allocations. ByteDance pulled in roughly $10.8 billion from about 20 lenders in 2024, in the largest dollar corporate loan in Asia outside Japan at the time. As recently as June, the company was in early talks over a record $20 billion loan facility, with the final numbers surpassing that mark by almost half.

ByteDance to focus loan on its AI venture

The only Asian borrower that has raised more from a loan facility in 2026 is Softbank. The investment company arranged a $40 billion bridge facility in March to back its OpenAI stake. The two deals are different, however, with SoftBank’s being a bridge against an equity position and set to be repaid once longer-term financing comes in, while ByteDance is borrowing against a business that already throws off cash. Banks are effectively treating TikTok and Douyin revenue as the security behind the ByteDance loan.

The stated purpose for this borrowing is general corporate purposes, which for ByteDance right now means compute, and a lot of it. The company is looking at capital spending of as much as $70 billion a year on AI infrastructure, a level that would place it alongside the American hyperscalers. The budget stretches even further than the number suggests, because it costs more than regular. US export controls cap ByteDance’s access to Nvidia’s top chips, so the AI expansion leans on custom silicon using Arm and RISC-V designs, Qualcomm inference parts, and domestic Chinese suppliers.

Assembling the same amount of compute that way becomes more expensive in the long run, with part of the spend still flowing to a rival. ByteDance pays more than $1 billion a year to run OpenAI’s models through Microsoft Azure while it funds the homegrown hardware meant to end that reliance. The company is said to be training a ten-trillion-parameter model and enlarging its data center cluster all within Inner Mongolia, which is a scale of development pure operating cash flow alone cannot cover.

The $70 billion capex plan sits right against the 160 billion yuan ($22.7 billion) that ByteDance had earlier claimed to budget for 2026, and accounts differ on whether the larger number is a firm decision or a scenario still under review. The company has not addressed these figures publicly, as it stays privately held, files no financial statements, and reveals its capital spending mainly through the banks that handle its funds. Big Tech’s AI-related debt has now passed $350 billion as firms fund data centers with borrowed money instead of their own earnings, and a deal this size moves a large chunk of that borrowing outside the U.S.

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The truce ends a dispute that broke out approximately six months ago. The controversy dates back to a clip created purely by AI of Tom Cruise trading blows with Brad Pitt, built with Seedance, and then spreading widely all over the internet. On February 20, MPA global general counsel Karyn Temple wrote to ByteDance general counsel John Rogovin, the Los Angeles Times reported, arguing that Seedance 2.0 had been trained on protected material and was turning out unauthorized clips of characters such as SpongeBob SquarePants alongside a recreated scene from “Stranger Things.”

ByteDance ends feud with MPA with copyright deal

Variety reported that the trade group accused ByteDance of “disregarding well-established copyright law that protects the rights of creators and underpins millions of American jobs” on a supposedly “massive scale.” Disney and other studios also objected to tools that could reproduce Marvel and Star Wars figures without permission, The News reported. The MOU then announced on Monday that it has created a structure covering ByteDance’s generative products, reaching users through TikTok, its separate U.S. TikTok app, CapCut, and Dreamina.

The MPA did not release the details of the specific barriers and deterrents in the deal to the public, the Los Angeles Times reported. Both companies have, however, pointed to newer releases as evidence that these safeguards have been initiated, with ByteDance claiming both Seedance 2.5 and Seedream 5.0 Pro, shipped last month, carry stronger IP protections. “Today’s agreement illustrates our belief that copyright is a cornerstone of the film and television industry,” MPA Chairman and CEO Charles Rivkin said in a statement.

He also added that the deal “reflects our shared determination to continue our work together to further fortify those guardrails.” ByteDance general counsel John Rogovin said the company “respects the intellectual property rights that underpin creative industries around the world” and said the MOU was “an important framework for continued collaboration as the technology evolves.” ByteDance is not the first AI company the MPA has pressured into concessions on its AI product.

The association had initially gone after OpenAI’s Sora before the firm added limits, according to Variety, with OpenAI eventually shutting Sora down earlier this year after a similar wave of unauthorized character videos. However, instead of fully retreating and shutting down its products, ByteDance is taking a different path, pouring more funds into Seedance, which is reportedly one of the most advanced video models available, alongside Google’s offerings.

The Los Angeles Times reported that Seedance has gained ground with independent filmmakers who find it cheaper than rival tools, a development that gives ByteDance a commercial reason to keep the studios afloat instead of completely disengaging from the market.

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The tool, which can generate realistic videos from text prompts or images, quickly gained attention online for producing cinematic clips that resembled scenes from popular films and featured AI-generated versions of well-known actors. However, the technology also triggered a backlash from entertainment companies, which argue that the system may have been trained on copyrighted material without authorization.

ByteDance accused of copyright infringement

A while after Seedance 2.0 was released in China, it began attracting criticism from streaming firms. Viral content featuring AI-generated celebrity combatants prompted serious questions regarding the legality of the model’s data. Last month, Disney slapped ByteDance with a cease-and-desist letter, alleging that the platform illegally bundled its franchises as if they were public-domain assets.

Disney specifically called out the theft of iconic figures from its massive Marvel and Star Wars universes. At the time, Disney’s attorney David Singer, also a partner at Jenner & Block, commented, “ByteDance’s virtual smash-and-grab of Disney’s IP is willful, pervasive, and totally unacceptable. We believe this is just the tip of the iceberg, which is shocking considering Seedance has only been available for a few days.”

After Disney took legal action, Paramount Skydance also accused ByteDance’s Seedance of looting its library, including South Park, Star Trek, Dora the Explorer, and The Godfather franchises, to train its AI tools. It sent a cease-and-desist letter to the firm. Moreover, Motion Picture Association chairman and CEO Charles Rivkin had chimed in, calling for an immediate end to ByteDance’s copyright violations.

In response to the backlash in February, ByteDance said it is reinforcing its safeguards against unauthorized use of intellectual property and likeness. According to reports, ByteDance has now suspended plans to expand its platforms into other regions. Seedance had initially intended to make its tools available by mid-March. The company’s lawyers and engineers are still working to pinpoint risks and build digital “guardrails” to prevent future AI infringement.

However, despite its setback, ByteDance is still planning to increase its computing power outside China, using advanced Nvidia AI chips. It has partnered with a Southeast Asian company with intentions to acquire Nvidia’s Blackwell chips in Malaysia for AI research and development. The partner’s Tier 1 designation from Nvidia gives it priority access to cutting-edge chips, allowing ByteDance to tap into that pipeline for hardware it cannot legally purchase in its home market.

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A statement on the Vietnam Competition Commission’s website noted that TikTok lacked a mechanism to facilitate the exercise of user privacy rights regarding data used for commercial purposes, such as advertising. Apart from these claims, the statement also noted that the social media platform failed to give specific users the right to submit complaints or address issues.

Vietnam slams TikTok with $33,516 fine for breach of rules

The action from Vietnam comes amid increased enforcement of data privacy and consumer rights rules, which took effect with the country’s new Personal Data Protection Law and updated regulatory decrees in early 2026. These laws require platforms to obtain clear, informed consent from users before collecting or using personal information, including details like phone numbers and more sensitive data, such as location and online behavior.

The move also shows that Vietnam is strict about enforcing the laws governing social media platforms. Following the announcement, individuals raised concerns about TikTok’s practices. Responding to these claims, the social media platform affirmed that it has begun implementing changes in line with the authority’s proposals.

The firm declared its commitment to establishing a transparent business and shopping environment, while strictly adhering to local regulations for social media platforms and adopting a customer-centric approach. It is worth noting that TikTok is not the first company to face a severe fine. Earlier, regulators in Vietnam also imposed a fine of around 810 million dong on the VNG Group, a tech company that manages Zalo, a messaging app.

This was after the commission discovered that VNG failed to provide consumers with an option to object to the use of their personal data, particularly by businesses, or decide to what extent this information could be used, following complaints raised by users. In response to these complaints, sources stated that the commission requested complete details on Zalo’s data usage and collection policies from VNG in late December, citing a statement on the government’s website.

As of now, VNG is working together with the commission to assess and revise its policies. For TikTok, this is the second time it has found itself in trouble with Vietnamese regulators, after facing a backlash in 2023 for failing to restrict content that violated local laws. While this legal battle continues, recent reports indicate that TikTok’s parent company, ByteDance, has finally completed a long-awaited deal to transfer significant portions of its US operations to investors based in the country.

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While details about the extent of the administration’s role in managing the platform remain fuzzy, its control seems to be at the heart of the deal. Nonetheless, the White House official maintained that the new agreement would guarantee data security, allowing oversight of the algorithm that curates user feeds and access to its source code.

White House on the verge of making a deal for TikTok

Since the beginning of his second term, President Donald Trump has approached governing much like an activist investor would manage a portfolio on a global scale. The administration announced in June that it had obtained a “golden share” in US Steel, ensuring that America retains influence despite the company’s takeover by Nippon Steel.

At the time, Trump mentioned that the arrangement gave Americans a 51% stake in the company, but it wasn’t immediately clear how that figure was calculated. Also, in August, the government acquired a 10% stake in Intel Corp., which had been struggling. According to the tech company, the US was issued 433.3 million shares of common stock, though it will have no role in management.

Secretary of Commerce Howard Lutnick had described the deal as a landmark moment for US semiconductor leadership, and Trump referred to it as a “great deal for America.” The pattern continued in September, when Pfizer reached an agreement to offer prescriptions on TrumpRx, a government-backed website, in exchange for eased tariffs.

US government plans to control TikTok

Now, for the TikTok deal, under Trump’s order, the Attorney General will receive data from the joint venture, and security partners may share it with other officials, potentially leading to significant oversight of user information. Final details are still being hammered out and will require approval from the Chinese government, which has not yet publicly endorsed the plan.

Should the proposal move forward, Trump and his administration might wield significant control over TikTok, including its moderation policies and response to law enforcement inquiries—powers that other platforms have long opposed. Trump has tried to ensure that the administration’s oversight will ensure equal rights for all users. He adds that there will be heavy-handed state control, but the process of moderation will try to be fair and transparent.

Officials say a joint venture could have independent review boards that would conduct regular audits to prevent bias and undue political influence. Despite these assurances, experts and critics remain cautious. The potential for a sitting president to influence a major social media platform is unprecedented, raising concerns about privacy, free expression, and the blurred lines between government authority and corporate operations.

Meanwhile, analysts have warned that even with oversight mechanisms, the administration’s involvement could shift the platform’s policies, potentially affecting what content is amplified or suppressed. There are also questions about international ramifications, as TikTok’s parent company, ByteDance, is based in China, and the deal may set a precedent for government intervention in global tech platforms.

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This partnership ensures a consistent supply of high-performance chips for ByteDance’s AI endeavors amidst ongoing U.S.-China tensions.

Strategic development of AI hardware

The new collaboration focuses on developing a 5-nanometer application-specific integrated circuit (ASIC) that conforms to U.S. export regulations. This move is significant as it marks one of the first major initiatives to develop a cutting-edge 5nm chip since the U.S. imposed stringent export controls on advanced semiconductors to China in 2022. 

Reuters cites insiders who reveal that Taiwanese giant TSMC is set to manufacture the chips, although production is expected to commence later this year. ByteDance, primarily recognized for its popular apps TikTok and Douyin, is venturing further into generative AI. 

The Beijing-based company is reportedly shifting from reliance on Nvidia’s A100 graphics processing units, used for running large language models (LLMs), to developing its proprietary chip technology. This strategic pivot is seen as a way to mitigate the impact of U.S. sanctions, which have restricted the export of high-end chips to China, and to lessen its dependency on Nvidia’s GPUs, which are currently scarce due to high global demand and U.S. export limitations.

Expanding capabilities in AI technology

The partnership between ByteDance and Broadcom is not new; it dates back to 2022 when ByteDance acquired Broadcom’s Tomahawk 5nm high-performance switch chip and its Bailly switch for AI computer clusters. With the planned AI chip, ByteDance aims to enhance the power of its algorithms significantly, thereby advancing its AI product capabilities.

This development is particularly crucial as ByteDance seeks to secure more efficient and cost-effective solutions for its hardware needs. This will enable the firm to maintain a stable chip supply for its growing range of AI projects. Such advancements are vital in an era when AI applications are becoming increasingly prevalent and require substantial computational power.

Global demand for AI chips skyrockets

The demand for AI processors has surged as companies like OpenAI and Microsoft intensify their use of LLMs for applications such as ChatGPT, which require extensive computational resources to train and operate. This rising demand has led to a notable shortage of AI chips, pushing the prices upward, with Nvidia’s A100 GPU reportedly priced at around $15,000 each.

A 2020 TrendForce report highlighted the intense resource needs of OpenAI’s GPT models, which required approximately 20,000 of Nvidia’s GPUs for processing training data. As AI technologies like ChatGPT continue to evolve, the demand for such hardware is only expected to increase, making collaborations like that of ByteDance and Broadcom more significant in the tech industry.

This strategic move by ByteDance not only aims at self-reliance in terms of chip supply but also marks a significant step in the global AI technology race, highlighting the intersection of technology development and international trade policies.

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