Alibaba and ByteDance Move AI Training To Southeast Asia To Bypass US Nvidia Ban

In a significant manoeuvre, Chinese tech titans Alibaba and ByteDance are strategically relocating their cutting-edge Artificial Intelligence (AI) training operations.

This move isn't about finding cheaper labour; it's a direct, calculated response to the geopolitical tensions restricting access to crucial American technology.

A Strategic Shift to Southeast Asia

To gain access to Nvidia chips and evade US actions limiting their development of advanced technology, major Chinese corporations are now training their artificial intelligence models overseas, the Financial Times reported on Thursday.

The report, which cited two individuals with direct knowledge, indicated that Alibaba and ByteDance are among the technology companies developing their latest large language models (LLMs) in Southeast Asian data centres.

The report stated that offshore training has seen a consistent rise following the US decision in April to restrict the distribution of the H20 semiconductor.

Seeking Chip Access Abroad: The Offshore Solution

According to the report, Chinese corporations typically use rental agreements to access overseas data centres owned and operated by non-Chinese operators. DeepSeek was cited as a notable difference, having amassed a large inventory of Nvidia chips before the US export bans and training its model domestically.

DeepSeek is also working with domestic chip producers, led by Huawei, to develop and improve the next generation of China's AI semiconductors, the Financial Times reported. While major Chinese tech firms seek external solutions to bypass US restrictions, tensions are also emerging closer to home.

The strategic manoeuvres overseas, however, come amid new domestic complexities for these tech giants. Recent reports indicate that even within China, companies are facing unexpected hurdles, with the government now intervening to manage the distribution of crucial hardware.

Internal Hurdles: China Blocks ByteDance Chip Use

According to a report by The Information, reviewed by Reuters and citing ByteDance staff, Chinese regulators have reportedly forbidden the TikTok parent company from deploying Nvidia chips in any new data centres.

This new ban underscores Beijing's ongoing campaign to lessen dependence on American technology. This effort has gained momentum as the US government implements stricter limits on the shipment of cutting-edge semiconductors into China.

The significance of the move stems from the fact that ByteDance was reportedly Nvidia's largest customer in China in 2025, buying more chips than local competitors. The firm had been scrambling to secure processing power for its massive user base amid concerns that the US could limit supply.

Chinese authorities had instructed domestic businesses to cease placing fresh orders for Nvidia AI processors back in August. Since then, they have been pressuring companies to adopt chips developed entirely in China.

Nvidia confirmed the situation in a statement to Reuters, with a spokesperson explaining that the existing regulations prevent the company from providing a competitive data centre graphics processing unit (GPU) in China. This development, they noted, surrenders that huge market to their rapidly growing international rivals.

Reuters previously reported that the Chinese government has issued an order requiring new data centre projects receiving state funding to use only artificial intelligence chips made in China.

This situation arises as China accelerates its plans to establish a distinct AI ecosystem and achieve greater independence in chip manufacturing, even as trade conflicts with Washington are currently at a sensitive impasse.

The Unwanted Compromise: Low Demand for H20

Washington has restricted the sale of Nvidia's most powerful chips to China, allowing only lower-performance versions such as the H20. Although Nvidia also released a chip specifically for the Chinese market, the RTX6000D, its demand has been low, with several major technology firms opting not to place orders.

US President Donald Trump made a statement after speaking with Chinese President Xi Jinping earlier this month, suggesting that Washington would permit the use of Nvidia products, though excluding the most cutting-edge semiconductors.