TikTok's Chinese parent ByteDance plans to develop an AI model trained primarily with chips from compatriot Huawei Technologies, said three people familiar with the matter, as U.S. curbs turn the social media giant homeward in search of chips.

ByteDance has diversified to domestic suppliers of chips used in artificial intelligence and accelerated development of its own since the U.S. in 2022 started restricting exports of advanced AI chips such as from market leader Nvidia.

AI has become central to the technology industry with firms in sectors as varied as gaming and e-commerce differentiating offerings through the integration of custom AI models - programs that employ pattern recognition to make decisions.

ByteDance's next step in the AI race is to use Huawei's Ascend 910B chip to train a large-language AI model, said the people, declining to be identified as the plan is confidential.

A fourth person also said ByteDance is planning a new AI model but could not say whether it will use Huawei chips.

ByteDance already uses the Ascend 910B primarily for less computationally intensive inference tasks, which involve pre-trained AI models making predictions, the three people and a separate source said.

Training AI models is far more demanding and requires huge amounts of data, necessitating the use of ultra-high-performance chips such as Nvidia's premium graphics processing units.

The new model's capability and complexity, measured by its computing parameters, will be less powerful than ByteDance's existing AI model Doubao, one of the people said.

"The entire premise here is wrong. No new model is being developed," said ByteDance spokesman Michael Hughes.

Huawei did not reply to Reuters' requests for comment.

Tight supply

ByteDance has ordered more than 100,000 Ascend 910B chips this year but has received fewer than 30,000 as of July, a pace too slow to meet company needs, one of the people said.

The constrained supply and limited computing power versus Nvidia's China-available chips have prevented ByteDance from setting a timeline for the new model, two of the people said.

ByteDance's current AI technology is used in its flagship large-language model launched in August 2023 and rebranded as chatbot Doubao, and in many other applications including a text-to-video tool Jimeng. It introduced two video-focused Doubao models this month to compete with OpenAI.

Use of such applications has ballooned since early this year, with ByteDance's chatbot becoming one of China's most popular apps with more than 10 million monthly active users.

The increased emphasis on AI has made ByteDance one of the largest buyers of Huawei's AI chips, the three people said.

It is also the biggest buyer of Nvidia's H20 AI chip, which the U.S. chipmaker tailored for the China market in response to trade restrictions, said two of the people. The TikTok owner is also Microsoft's biggest client in Asia for Nvidia chips accessible via cloud computing, said two separate sources.

Reuters previously reported that ByteDance allocated $2 billion for Nvidia chips last year.

Nvidia declined to comment. Microsoft did not reply to a request for comment.