ByteDance negotiates major AI chips deal with Iluvatar CoreX as China shifts from Nvidia

ByteDance is in talks to buy AI chips from China's Iluvatar CoreX

A deal would make the Shanghai GPU maker the TikTok owner's third domestic chip supplier, after Huawei and Cambricon ByteDance is in talks to buy artificial-intelligence chips from Iluvatar CoreX, a Shanghai-based GPU maker that until recently sold almost entirely to government buyers, according to people familiar with the discussions cited by Reuters. The talks point to how far the owner of TikTok and Douyin is willing to go to lessen its dependence on Nvidia. Iluvatar CoreX is expected to ship at least 50,000 chips to ByteDance this year, the sources said, most of them destined for inference work rather than training. Inference, the business of answering user queries once a model is built, is the less hardware-hungry half of the AI workload, and it is where Chinese designers have the better chance of matching imported silicon. ByteDance wants the capacity to widen the user base of Doubao, its consumer chatbot. Should a deal be agreed, Iluvatar would become ByteDance's third major domestic GPU supplier, after Huawei and Cambricon. The company is also weighing a separate purchase of Baidu's Kunlunxin chips, the same people said, which would give it a fourth. The arithmetic of the deal is striking against Iluvatar's size. The company, which listed in Hong Kong in January, reported revenue of 1 billion yuan, about $148m, for 2025, roughly 90% of it from selling GPUs. A 50,000-chip order from a single buyer the scale of ByteDance would be a different order of business entirely, and a notable shift for a supplier whose sales have so far leaned on state procurement. The talks sit inside a wider effort across Chinese technology to build alternatives to Nvidia, whose most advanced chips remain subject to US export controls. Iluvatar's flagship TianGai-100 line is pitched as a competitor to Nvidia's A100 and A800 parts. Whether it performs at that level in production, across a customer running services at ByteDance's scale, is the question the order would answer. Until now, Iluvatar has sold mainly into government procurement projects, which makes a commercial order at this scale a meaningful change in its customer mix as well as its revenue. A buyer the size of ByteDance brings the kind of demanding, high-volume workload that tends to expose whatever a chip cannot yet do, and a supplier's ability to meet it is part of what such a deal would prove. The reported 50,000-chip figure is described as an expectation for the year rather than a signed commitment. The split between inference and training matters to how far the shift can go. ByteDance is reported to be sourcing the parts for inference, the lighter workload, while the most demanding training runs still lean on the most powerful accelerators, where Chinese designers have further to travel. A domestic supplier handling inference at scale would still leave the harder half of the problem partly dependent on imported silicon. The details are not final and remain subject to change, the sources cautioned. ByteDance and Iluvatar CoreX have not commented publicly on the discussions. What is clear is the direction of travel: a company that built its products on imported accelerators is now shopping for them at home.

ByteDance in talks with China's Iluvatar CoreX to purchase AI chips

ByteDance, the influential technology entity known for its innovative platforms, is reportedly in discussions to acquire AI chip technology from Iluvatar CoreX and Baidu. This strategic move is largely focused on securing in-house chip supplies essential for running complex inference tasks. Should this partnership materialize, Iluvatar CoreX may join the ranks as ByteDance's third key GPU vendor. Chinese technology company ByteDance is in talks with Shanghai-based Iluvatar CoreX to purchase AI chips for inference work and is also considering a similar deal with Baidu, according to two sources familiar with the matter. If a deal is agreed, Iluvatar CoreX would become ByteDance's third major domestic supplier of graphics processing units (GPUs) after Huawei and Cambricon, the sources added. TikTok parent ByteDance is also considering using Baidu's Kunlunxin chips, they said, declining to be named as the talks are not public. ⁠Tencent is ⁠already a Kunlunxin chip customer, according to one of the sources. ByteDance, Iluvatar CoreX, Baidu and Tencent did not respond to requests for comment. The potential deals demonstrate that efforts by Chinese chipmakers to offer alternatives to foreign AI chips are gaining traction as Beijing promotes the use of locally developed chips to improve self-reliance amid U.S. export controls on advanced chips. Chinese GPU and AI chipmakers captured nearly 41% of China's AI accelerator server market last year, eroding Nvidia's once-dominant position in one of its most important overseas markets, Reuters ⁠reported in April. While Nvidia's market share in China has effectively fallen to zero, according to its CEO Jensen Huang, Chinese AI chips would become available in large quantities in the second half ⁠of this year, Tencent's Chief Strategy Officer James Mitchell said in May. Iluvatar CoreX, one of China's leading GPU startups, is expected to ship at least 50,000 chips to ByteDance this year and most of them will be used for inference workloads, as ByteDance expands the customer base for its signature AI chatbot Doubao, the sources said. Inference workloads involve answering queries and are different from AI model training, which tends to use the most powerful chips. The details of the potential deals are not final and still subject to change, the sources said. Commercial milestone A deal with ByteDance, one of China's biggest technology companies and a major spender on AI infrastructure, would be a significant commercial milestone for Iluvatar CoreX. Until now, the Shanghai-based company has mainly supplied government procurement projects, one of the sources ⁠said. Iluvatar CoreX, which listed in Hong Kong in January, reported 1 billion yuan ($148 million) in 2025 revenue, about 90% from selling GPUs, as it benefited from growing demand for domestic AI hardware. Its Tiangai series chips are tailored for AI training, while its Zhikai series is geared toward inference tasks, according to its website. Iluvatar CoreX's revenue is projected to reach 3.04 billion yuan ($449.8 million) this year, with total shipments expected to jump 139% to over 100,000 chips, according to a Huatai Securities research note. The broker estimated the Zhikai inference chips had an average selling price of 12,000 yuan, or about $1,775 each.

Nvidia's China Woes Deepen As TikTok Parent ByteDance Eyes AI Chips From Iluvatar CoreX, Baidu: Report -

ByteDance, the parent company of TikTok, is reportedly in talks with Iluvatar CoreX and Baidu Inc. (NASDAQ:BIDU) to acquire AI chips. Iluvatar CoreX is projected to deliver at least 50,000 chips to ByteDance this year, primarily for AI inference tasks, as the company broadens the user base of its Doubao chatbot. If the deal goes through, Iluvatar CoreX would become ByteDance's third major domestic GPU supplier, following Huawei and Cambricon, according to a Reuters report on Monday. ByteDance did not immediately respond to Benzinga's request for comments. Nvidia Adapts To China Curbs This development comes after a report in March suggested that ByteDance planned a major AI infrastructure expansion in Malaysia, underscoring how Chinese tech firms are building computing capacity overseas amid U.S. export restrictions. The project reportedly involved deploying around 36,000 of Nvidia Corp.'s (NASDAQ:NVDA) B200 AI chips through cloud provider Aolani Cloud, with hardware costs potentially exceeding $2.5 billion. However, amid Beijing's push, Chinese GPU and AI chip manufacturers claimed nearly 41% of the domestic AI accelerator server market last year, challenging NVIDIA's long-held dominance in a market that once generated over 20% of its data center revenue. Meanwhile, according to a Reuters report on Friday, NVIDIA has started marketing its new Vera AI data-center CPU to Chinese customers, with orders now open and availability expected as early as August. The chip is Nvidia's first standalone CPU designed specifically for agentic AI workloads. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.