The secret procurement could change the AI hardware landscape in China, as ByteDance focuses on domestic GPUs for inference while negotiations remain pending.
BEIJING, June 15 – ByteDance is in talks with Shanghai-based company Iluvatar CoreX to buy AI chips for inference tasks and is considering a similar deal with Baidu, according to two people familiar with the matter.
If the deal goes through, Iluvatar CoreX will become ByteDance’s third in-house GPU supplier after Huawei and Cambricon.
It is also reported that ByteDance is considering using Baidu’s Kunlunxin chip. Tencent is already a user of Kunlun’s new chip, said the source, who requested anonymity.
ByteDance, Iluvatar CoreX, Baidu and Tencent did not respond to requests for comment.
The potential deal highlights the growing role of Chinese chipmakers as an alternative to foreign solutions amid the government’s push to support domestic development and reduce dependence on imported technology in the context of U.S. export controls.
Last year, Chinese GPU and AI chip makers captured about 41% of China’s server AI accelerator market, reducing Nvidia’s position. But experts expect Chinese chips to become more widely available in the second half of this year.
Iluvatar CoreX, one of China’s leading GPU-focused startups, plans to ship at least 50,000 chips to ByteDance this year, the majority of which will be used for inference tasks, helping ByteDance expand its use of the Doubao chatbot.
Inference tasks are different from training models, which focus on answering queries and require the most powerful chips.
Details of potential transactions are not final and are subject to change.
commercial stage
The deal with ByteDance could be a commercially significant milestone for Iluvatar CoreX. Currently, the company mainly supplies products ordered by the government.
Iluvatar CoreX, which was listed in Hong Kong in January 2026, reported sales of about 1 billion yuan in 2025, reflecting the growing demand for AI chips in the country, and about 90% of its sales came from GPU sales.
The Tiangai line is designed for AI training, while the Zhikai is aimed at performing inference tasks, according to manufacturer documentation.
According to analysts at Huatai Securities, Iluvatar CoreX’s sales this year could reach 3.04 billion yuan, and total chip shipments could exceed 100,000 pieces. The average price of Zhikai chips is about 12,000 yuan.
Hong Kong’s Iluvatar CoreX shares rose about 12% after the data was released.
This development highlights the changes in China’s domestic AI solutions market and the growing role of local manufacturers amid global trade and technological challenges.
Details regarding the transaction are not final and are subject to change as negotiations continue.
ByteDance and Iluvatar CoreX’s prospects depend largely on how well Chinese chips can strengthen supply chains and meet the needs of big tech companies in the areas of inference and data processing.
