ByteDance in talks to buy Chinese AI chip maker Iluvatar CoreX
Chinese tech firm ByteDance is in talks to buy AI processors for inference work from Shanghai-based Iluvatar CoreX (9903.HK), and is also eyeing a similar deal with Baidu (9888.HK), two persons with knowledge of the subject said.
If an agreement is reached, Iluvatar CoreX would be ByteDance’s third major domestic GPU supplier after Huawei and Cambricon (688256.SS), the sources stated.
ByteDance, TikTok’s company, is also considering utilising Baidu’s (9888.HK) Kunlunxin chips, they said, declining to be named as the discussions are private. Tencent (0700.HK) is already a customer for Kunlunxin chips, one of the sources said.
ByteDance, Iluvatar CoreX, Baidu and Tencent did not respond to requests for comment.
The possible acquisitions reflect Chinese chipmakers’ efforts to build alternatives to foreign AI chips that are gaining pace as Beijing pushes the use of locally made chips to increase self-reliance amid U.S. export limits on sophisticated processors.
In April, Reuters reported that Chinese GPU and AI chip makers took about 41% of China’s AI accelerator server market last year, eating into Nvidia (NVDA.O)’s once-dominant position there in one of its most crucial overseas markets.
In the second half of this year, Chinese AI chips would be accessible in big quantities, while Nvidia’s market share in China has effectively gone to nothing, Tencent’s Chief Strategy Officer James Mitchell said in May.
The sources claimed Iluvatar CoreX, a top GPU startup in China, expects to sell at least 50,000 chips to ByteDance this year, with the most of them going to inference workloads as ByteDance adds customers to its flagship AI chatbot, Doubao.
Inference workloads are all about answering questions and they are different from AI model training that tends to use the most powerful CPUs.
Sources stated the terms of the possible deals are not final and could possibly alter.
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A partnership with ByteDance — one of China’s biggest digital businesses and a heavy spender on AI infrastructure — would mark a key commercial milestone for Iluvatar CoreX. The Shanghai-based company has largely supplied government procurement projects until now, said one of the sources.
Iluvatar CoreX, which debuted in Hong Kong in January, had sales of 1 billion yuan ($148 million) in 2025, almost 90% of which came from selling GPUs, as it benefited from increased demand for local AI gear.
Its Tiangai series chips are designed for AI training, and its Zhikai series is targeted at inference tasks, according to its website.
The research note said Huatai Securities estimated Iluvatar CoreX’s sales would reach 3.04 billion yuan ($449.8 million) this year, with total shipments soaring 139% to more than 100,000 chips. The average selling price for the Zhikai inference chips was 12,000 yuan, or around $1,775 each, said the trader.
Shares of Iluvatar Corex jumped 12% in Hong Kong after the Reuters report.