China's ByteDance gained access to over 2k Nvidia B200 chips through Norway
3 hours ago
- ByteDance's Singaporean subsidiary Spring accounted for $24 million of Nscale's $33 million 2025 revenue, giving it access to 2,304 Nvidia B200 chips at a Norway data center.
- The deal was legal but exploited loopholes in U.S. export controls on advanced AI chips to China, exposing Nscale to regulatory and reputational risks.
- Nscale's S-1 filing for a U.S. IPO did not directly mention ByteDance; the connection emerged in a $105 million loan agreement with Macquarie, where Spring was named a significant customer.
- Nvidia invested over $660 million in Nscale and later increased commitments to over $2 billion, plus an $860 million guarantee, helping Nscale secure large deals with Microsoft ($44 billion) and Anthropic ($45 billion).
- As Nscale wins Western clients, the Spring contract is expected to shrink to below 20% of overall revenue, reducing concentration risk.
- Macquarie required Nscale to monitor Spring's usage of AI chips for potential export control violations, and third-party due diligence was conducted on ByteDance and Spring.
- Chinese companies are increasingly using loopholes to rent or buy advanced AI chips abroad, but the U.S. is closing these loopholes, potentially affecting existing deals like Spring-Nscale.
- Despite regulatory uncertainty, Nscale could benefit from delays in U.S. gigawatt-scale data center projects as hyperscalers seek compute from smaller facilities.