Azarudeen Mohamed Ali @Azarudeen17: "East or West, Nvidia chips..."

United Arab Emirates

East or West, Nvidia chips are the best: The US has spent three years trying to cut Chinese AI companies off from advanced chips. ByteDance just found a way around it, through Malaysia. According to a Wall Street Journal report published Thursday, ByteDance is assembling roughly 36,000 Nvidia Blackwell B200 GPUs in Malaysia, working through a Southeast Asian firm called Aolani Cloud, with the hardware potentially costing more than $2.5 billion. Breaking down the buzz: ByteDance could not import the chips directly into China. So it found a third-party server assembler, which builds systems using Nvidia chips. It found a cloud operator in Malaysia to host them. It structured the arrangement so the compute is physically located outside China and therefore outside the export control framework. That is an expensive infrastructure operation built specifically to access chips the US intended to withhold. And this is only one of three parallel paths ByteDance is running. It is separately negotiating with Washington for direct H200 chip sales to China, a deal that has stalled because Nvidia has not agreed to the proposed conditions. It is also building its own chips internally through a Singaporean entity called Picoheart, targeting a processor that matches Nvidia's China-tailored H20 at lower cost. Why this matters: Good news for Nvidia. Chinese firms want these chips badly enough to build international infrastructure just to get access to them. The export control just makes that demand more complicated to satisfy. That speaks volumes about how indispensable Nvidia's hardware is for training AI at scale. The ByteDance playbook is not unique to ByteDance. If one company can route around export controls through Malaysia, others can too. The controls are producing workarounds and each workaround that succeeds makes the next one easier to justify. Copy my portfolio for steady and consistent growth, $NVDA (NVIDIA Corporation)

Not investment advice. The author may have financial interests in the mentioned instruments.

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