ByteDance is in talks with Shanghai-based Iluvatar CoreX to buy AI chips for inference work, according to two people familiar with the matter.
The TikTok parent is also considering a similar deal with Baidu for its Kunlunxin chips, the sources said.
If a deal is reached, Iluvatar CoreX would become ByteDance’s third major domestic supplier of graphics processing units after Huawei and Cambricon.
ByteDance is also considering using Baidu’s Kunlunxin chips. 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 show that Chinese chipmakers are gaining traction as alternatives to foreign AI chips. Beijing has been pushing companies to use locally developed chips to improve self-reliance amid US export controls on advanced chips.
Chinese GPU and AI chipmakers captured nearly 41% of China’s AI accelerator server market last year. That has weakened Nvidia’s once-dominant position in one of its most important overseas markets.
Nvidia CEO Jensen Huang has said the company’s market share in China has effectively fallen to zero. Tencent Chief Strategy Officer James Mitchell said in May that Chinese AI chips would become available in large quantities in the second half of this year.
Iluvatar CoreX is expected to ship at least 50,000 chips to ByteDance this year, according to the sources. Most of those chips will be used for inference workloads as ByteDance expands the customer base for its AI chatbot Doubao.
Inference workloads involve answering queries. They are different from AI model training, which usually requires the most powerful chips. The details of the potential deals are not final and remain subject to change.
A deal with ByteDance would be a major commercial milestone for Iluvatar CoreX. ByteDance is one of China’s biggest technology companies and a major spender on AI infrastructure.
Until now, Iluvatar CoreX has mainly supplied government procurement projects, according to one of the sources.
Iluvatar CoreX was listed in Hong Kong in January.
The company reported 1 billion yuan, or about $148 million, in 2025 revenue.
About 90% of that revenue came from selling GPUs, as the company benefited from rising demand for domestic AI hardware.
Its Tiangai series chips are designed for AI training, while its Zhikai series is focused on inference tasks, according to the company’s website.
Huatai Securities expects Iluvatar CoreX’s revenue to reach 3.04 billion yuan, or about $449.8 million, this year.
The broker also expects total shipments to rise 139% to more than 100,000 chips.
It is estimated that Zhikai inference chips had an average selling price of 12,000 yuan, or about $1,775 each.
Iluvatar CoreX shares rose 12% in Hong Kong after the Reuters report.
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