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ByteDance holds talks with Iluvatar CoreX to purchase AI chips
ByteDance is negotiating to buy 50,000 AI chips from Iluvatar CoreX this year for inference workloads. The deal cuts reliance on foreign hardware amid U.S. export controls.
ByteDance is negotiating with Shanghai-based Iluvatar CoreX to purchase domestic AI chips for inference workloads, according to two sources familiar with the matter. The deal would make Iluvatar CoreX the TikTok parent's third major local graphics processing unit supplier, signaling a major shift toward domestic hardware as U.S. export controls tighten.
Shifting supply chains
ByteDance is also evaluating a similar arrangement with Baidu to use its Kunlunxin chips. Tencent already purchases Kunlunxin hardware. If finalized, these agreements would reduce ByteDance's reliance on foreign silicon.
Chinese GPU and AI chipmakers captured nearly 41% of the country's AI accelerator server market last year. "Nvidia's market share in China has effectively fallen to zero," Nvidia CEO Jensen Huang said. Chinese AI chips will become available in large quantities in the second half of this year, Tencent Chief Strategy Officer James Mitchell said in May.
Scaling inference workloads
Iluvatar CoreX is expected to ship at least 50,000 chips to ByteDance this year. Most of this hardware will support inference tasks as ByteDance grows the customer base for its Doubao AI chatbot. Inference tasks involve processing user queries, which require different hardware specifications than initial AI model training, a key distinction for teams deploying Generative AI and LLM applications.
Commercial milestones for domestic startups
A contract with ByteDance marks a significant commercial milestone for Iluvatar CoreX, which has historically focused on government procurement projects. The company reported 1 billion yuan ($148 million) in 2025 revenue, with 90% derived from GPU sales. Its Tiangai series targets AI training, while the Zhikai series is built for inference.
Analysts at Huatai Securities project Iluvatar CoreX's revenue will reach 3.04 billion yuan ($449.8 million) this year. Total shipments are expected to jump 139% to over 100,000 chips, reflecting the growing infrastructure demands placed on AI for IT & Development teams managing large-scale deployments. The broker estimated the Zhikai inference chips carry an average selling price of 12,000 yuan, or about $1,775 each. Iluvatar CoreX shares rose 12% in Hong Kong following the report.
Why this matters for IT and development professionals
The shift toward domestic Chinese AI chips alters hardware procurement and deployment strategies for tech teams operating in or with the Chinese market. Development teams must now account for varying hardware specifications between training and inference environments when optimizing models like Doubao. Understanding these distinct architectural requirements is critical for maintaining performance as supply chains fragment.