ByteDance eyes third AI chip supplier in China

ByteDance is in discussions with Shanghai-based Iluvatar CoreX to acquire AI chips for inference workloads, according to sources familiar with the matter, as the TikTok owner expands its domestic semiconductor supply network.

The company is also considering a similar procurement agreement with Baidu, reflecting intensifying demand for locally developed AI hardware amid China's push for greater technology self-sufficiency.

If completed, the agreement would make Iluvatar CoreX ByteDance's third major domestic graphics processing unit supplier after Huawei and Cambricon.

The talks underscore how Chinese technology companies are increasingly relying on domestic chipmakers to support artificial intelligence development, particularly for inference tasks that power deployed AI applications.

Iluvatar CoreX is projected to generate 3.04 billion yuan ($449.8 million) in revenue this year, according to a Huatai Securities research note, with annual shipments expected to rise 139% to more than 100,000 chips.

The brokerage estimated that the company's Zhikai inference chips carry an average selling price of around 12,000 yuan ($1,775) per unit.

Following reports of the discussions, shares of Iluvatar CoreX rose 12% in Hong Kong trading as investors responded positively to the prospect of a major supply agreement with ByteDance.