ByteDance, the parent company of TikTok, is building significant computing infrastructure using top-tier Nvidia processors in Southeast Asia as part of its strategy to compete globally in AI development. This is one technique China is using to get around U.S. AI export controls.
The Wall Street Journal reports that ByteDance is collaborating with Southeast Asian cloud computing provider Aolani Cloud to deploy approximately 500 Nvidia Blackwell computing systems in Malaysia, which would include roughly 36,000 B200 AI chips, according to sources with knowledge of the arrangement. This computing power will support the company’s artificial intelligence research and development efforts outside of China while meeting growing AI demands from its international customer base.
The arrangement involves Aolani purchasing servers from Aivres, a company specializing in assembling servers equipped with Nvidia chips. If completed as planned, the total hardware costs would likely exceed $2.5 billion. An Aolani spokesperson confirmed the company currently operates with approximately $100 million in hardware.
ByteDance, which generates about a quarter of its revenue from markets outside China, has positioned itself to compete with major American technology companies including Google and OpenAI across various AI applications aimed at everyday consumers. The company has developed over a dozen AI applications for the Chinese market along with corresponding versions for international users. These include Dola, a chatbot, Dreamina for video creation, and Gauth, a homework cheating tool.
The company’s AI video-generation technology, Seedance, has attracted considerable attention for its capability to transform written script prompts into realistic short film sequences. According to a January analysis by venture capital firm Andreessen Horowitz, ByteDance operates five of the world’s 50 most widely used consumer AI applications based on monthly active users.
ByteDance maintains substantial teams of AI researchers and engineers across Singapore, San Jose, California, and Seattle. These teams collaborate with colleagues in China on fundamental AI research while also contributing to the development of AI models and products, many specifically designed for non-Chinese markets.
The arrangement highlights how Chinese technology companies are circumventing U.S. export restrictions that have prevented Nvidia from directly selling its most advanced AI chips, including the Blackwell series, to China for over three years. Chinese technology executives have indicated that limited access to high-performance computing resources has hampered their AI development efforts.
In response to these restrictions, Chinese companies have increasingly sought computing power in other countries where U.S. export control regulations are less established. This has created a new industry of intermediaries who facilitate the construction of data centers equipped with Nvidia chips and lease the computing capacity to Chinese tech firms.
An Aolani spokesperson stated the company fully adheres to all applicable export control regulations and clarified that customers do not own chips in Aolani facilities nor hold claims over them.
A Nvidia spokesperson explained that export regulations are designed to permit cloud infrastructure construction and operation outside controlled countries like China. The spokesperson confirmed that Nvidia’s compliance team reviews all cloud partners before selling chips either directly or indirectly.
CODE RED author Wynton Hall told the Daily Mail in an interview published Sunday that China has disguised its “data vacuum” AI espionage tools as popular apps like TikTok and DeepSeek. According to Hall, users of these “Trojan Horse” apps are “effectively surrendering their privacy and security to the Chinese regime.”
As documented in CODE RED, Chinese officials gloat about the power of TikTok to not only poison the minds of young westerners using its sinister algorithm, but also to suck up vast amounts of data to use for intelligence purposes, which is where the power of AI comes in — only its being used against America.
Senator Marsha Blackburn (R-TN), who was named one of TIME’s 100 Most Influential People in AI, praised CODE RED as a “must-read.” She added: “Few understand our conservative fight against Big Tech as Hall does,” making him “uniquely qualified to examine how we can best utilize AI’s enormous potential, while ensuring it does not exploit kids, creators, and conservatives.” Award-winning investigative journalist and Public founder Michael Shellenberger calls CODE RED “illuminating,” ”alarming,” and describes the book as “an essential conversation-starter for those hoping to subvert Big Tech’s autocratic plans before it’s too late.”
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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