Exclusive: ByteDance in talks with China’s Iluvatar CoreX to purchase AI chips, sources say

ByteDance is in talks to purchase at least 50,000 AI chips from Shanghai-based Iluvatar CoreX for inference work, according to sources familiar with the matter. If finalized, the deal would make Iluvatar CoreX the third major domestic GPU supplier for the TikTok parent, following Huawei and Cambricon.

Why is ByteDance seeking domestic AI chip suppliers?

ByteDance is pursuing local alternatives to improve self-reliance amid U.S. export controls on advanced chips. Beijing has actively promoted the use of locally developed hardware to offset foreign restrictions.

The shift follows a significant change in market dynamics. Chinese GPU and AI chipmakers captured nearly 41% of China’s AI accelerator server market last year, according to a Reuters report from April. Nvidia CEO Jensen Huang stated that the company’s market share in China has effectively fallen to zero.

What are the terms of the potential Iluvatar CoreX deal?

Sources say Iluvatar CoreX is expected to ship at least 50,000 chips to ByteDance this year. Most of these units will handle inference workloads, which involve answering queries, as ByteDance expands the user base for its AI chatbot, Doubao.

Iluvatar CoreX offers two distinct product lines. The Tiangai series is tailored for AI training, while the Zhikai series is geared toward inference tasks. The details of the potential deal remain subject to change and are not yet final.

How does this impact Iluvatar CoreX’s business?

A deal with ByteDance would mark a major commercial milestone for the Shanghai-based startup. Until now, the company has primarily supplied government procurement projects, according to one source.

The company, which listed in Hong Kong in January, reported 1 billion yuan ($148 million) in 2025 revenue, with about 90% derived from GPU sales. A Huatai Securities research note projects revenue will reach 3.04 billion yuan ($449.8 million) this year. Total shipments may jump 139% to over 100,000 chips.

What happens next for ByteDance’s AI infrastructure?

ByteDance may further diversify its supply chain by using Baidu’s Kunlunxin chips. One source noted that Tencent is already a customer of Kunlunxin.

Tencent’s Chief Strategy Officer James Mitchell said in May that Chinese AI chips could become available in large quantities in the second half of this year. Following the report of the potential ByteDance deal, Iluvatar CoreX shares rose 12% in Hong Kong.

Frequently Asked Questions

Who are ByteDance’s current domestic GPU suppliers?
ByteDance currently uses Huawei and Cambricon as its major domestic suppliers.

What is the difference between the Tiangai and Zhikai chip series?
According to the company website, Tiangai chips are designed for AI training, while Zhikai chips are designed for inference tasks.

What is the projected growth for Iluvatar CoreX shipments?
Huatai Securities expects total shipments to increase by 139% to more than 100,000 chips this year.

Will domestic hardware suffice for the next generation of AI chatbots?