ByteDance weighs major domestic AI chip order
ByteDance, the Chinese owner of TikTok, is in talks to buy at least 50,000 artificial intelligence chips from Shanghai-based Iluvatar CoreX as it races to expand computing capacity for AI services, according to a Hokanews report citing Reuters and people familiar with the matter.
The potential purchase would mark one of ByteDance’s most visible moves to secure homegrown semiconductors as Chinese technology companies face tighter access to advanced chips made by Nvidia and other foreign suppliers. The report said ByteDance is also evaluating chips from Kunlunxin, the AI semiconductor unit linked to Baidu.
No final agreement has been announced. ByteDance, Iluvatar CoreX and Baidu did not immediately confirm terms in the report, including price, delivery schedule or whether the chips would be used mainly for training AI models, running consumer applications or powering cloud services.
ByteDance has become one of China’s most aggressive investors in artificial intelligence. Its products rely heavily on machine-learning systems for recommendations, advertising, content moderation and creation tools. The company has also been expanding generative AI offerings in China, where domestic rivals including Alibaba, Tencent, Baidu and startups are competing to build large language models and AI assistants.
A purchase of 50,000 chips would underline how access to computing power has become a central constraint in the AI race. Advanced chips are needed to train large models and to process the huge number of requests generated when those models are deployed to users.
China’s chip strategy gains urgency
The talks come as Beijing pushes companies to reduce reliance on foreign semiconductor technology. U.S. export controls have limited China’s access to the most advanced AI chips, prompting Chinese technology companies to seek domestic alternatives and invest in local supply chains.
Iluvatar CoreX is part of a growing group of Chinese chip designers trying to challenge foreign suppliers in graphics processors and AI accelerators. The company has promoted its products for training and inference workloads, the two core functions behind modern AI systems.
Kunlunxin, meanwhile, has been central to Baidu’s own AI infrastructure strategy. A ByteDance purchase from Kunlunxin would show how China’s largest internet companies may increasingly rely on each other’s hardware efforts, even as they compete in consumer AI, search, cloud computing and advertising.
The reported talks also reflect a broader shift in the global technology industry. Companies that once focused mainly on software platforms are now treating chips, data centers and power supply as strategic assets. In the United States, major technology companies have spent heavily on Nvidia processors and custom chips. In China, similar demand is colliding with geopolitical limits on supply.
For ByteDance, securing chips is especially important because its products operate at enormous scale. TikTok and Douyin, its Chinese sister app, depend on fast recommendation systems that analyze user behavior and deliver personalized video feeds. More advanced AI tools could increase the company’s need for both training clusters and inference capacity.
Analysts say domestic Chinese chips still face challenges matching the performance and software ecosystem of leading foreign processors. But large orders from companies such as ByteDance could help local suppliers improve production, attract capital and refine developer tools.
The outcome of ByteDance’s negotiations may signal how quickly China’s AI industry can shift toward domestic hardware. Even without a confirmed deal, the talks show that chip procurement has become as important to AI companies as models, data and talent.
