The potential deal shows efforts by Chinese chipmakers to provide an alternative to foreign AI chips are gaining momentum.
issued Monday, June 15, 2026 · 11:40am
[BEIJING] Chinese technology company ByteDance is in talks with Shanghai-based Ilvatar CoreX to buy artificial intelligence chips for inference work and is considering a similar deal with Baidu, two people familiar with the matter said.
If the deal is agreed, Iluvatar CoreX will become ByteDance’s third major domestic graphics processing unit (GPU) supplier after Huawei and Cambricon, the people added.
TikTok’s parent company ByteDance is also considering using Baidu’s Kunlunxin chip, but the person asked not to be identified as the discussions are private. Tencent is already a customer of Kunlun New Chip, one of the sources said.
ByteDance, Iluvatar CoreX, Baidu and Tencent did not respond to requests for comment.
The potential deal signals efforts by Chinese chipmakers to provide alternatives to foreign AI chips are gaining momentum as the Chinese government seeks to shore up its self-reliance and promotes the use of domestically produced chips amid U.S. export restrictions on advanced chips.
Chinese GPU and AI chip makers 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.
Nvidia’s market share in China has virtually dropped to zero, according to CEO Jensen Huang, but Tencent’s chief strategy officer James Mitchell said in May that Chinese AI chips would be available in large quantities in the second half of this year.
Iluvatar CoreX, one of China’s leading GPU startups, plans to ship at least 50,000 chips to ByteDance this year, most of which will be used for inference workloads as ByteDance expands the customer base for its flagship AI chatbot Doubao, sources said.
Inference workloads involve answering queries and are different from training AI models, which tend to use the most powerful chips.
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Details of the potential deal are not final and are subject to change, the people said.
commercial milestone
The deal with ByteDance, one of China’s largest technology companies and a major investor in AI infrastructure, marks a commercially significant milestone for Iluvatar CoreX. The Shanghai-based company has so far mainly supplied government procurement projects, one of the people said.
Iluvatar CoreX, which was listed in Hong Kong in January, benefited from growing demand for AI hardware in the country and reported sales of 1 billion yuan (S$189 million) in 2025, about 90% of which came from GPU sales.
The company’s Tiangai series chips are tailored for AI training, and its Zhikai series is designed for inference tasks.
According to a Huatai Securities research note, Iluvatar CoreX’s revenue this year is expected to reach 3.04 billion yuan, and total shipments are expected to increase by 139% to more than 100,000 chips.
The broker estimated that the average selling price for Zhikai inference chips is 12,000 yuan, or approximately US$1,775 each. Reuters
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