ByteDance, the parent company of TikTok, is holding discussions with Shanghai-based Iluvatar CoreX to acquire AI inference GPUs, according to sources cited by Reuters. The company is also weighing a separate deal to buy chips from Baidu's Kunlunxin unit. These moves underscore a broader push by Chinese firms to secure alternative AI hardware.
The talks come as the U.S. continues to restrict exports of advanced semiconductors to China, including Nvidia's high-end AI chips. For ByteDance, which operates massive recommendation algorithms for Douyin and TikTok, access to inference chips is critical for deploying AI models at scale. Both Iluvatar CoreX and Kunlunxin are part of a growing domestic ecosystem seeking to fill the gap left by restricted foreign suppliers.
Iluvatar CoreX is publicly traded in Hong Kong under the ticker 9903.HK, though its market share remains small relative to global leaders. Baidu's Kunlunxin unit has been developing its own AI chips for years, though their adoption has been limited. The precise terms, timeline, and volumes of any potential deal have not been disclosed. Neither company has publicly commented on the reported negotiations.
If completed, these agreements could signal a shift in China's AI supply chain toward self-reliance. However, it remains unclear whether domestic chips can match the performance of Nvidia's offerings for inference workloads. ByteDance's computational demands are among the largest in the industry, making chip performance a critical factor. The deals would also require approval from Chinese regulators.
Some analysts caution that domestic chips may struggle with software ecosystems and scalability, which remain dominated by Western firms. The outcome of these talks could set a precedent for other Chinese tech giants facing similar hardware constraints.