ByteDance weighs domestic AI chip deals with Iluvatar CoreX, Baidu

ByteDance was moving to secure more domestic AI hardware as U.S. export controls tightened the path to top-end foreign chips and Chinese developers raced to keep large AI services running at scale. The TikTok parent was in talks with Shanghai-based Iluvatar CoreX to buy inference chips and was also considering a similar arrangement with Baidu, a sign that China’s AI supply chain is becoming more local, more interdependent and more urgent.

The focus on inference chips matters. These are the processors used to serve models to users after training, which means they are essential for product deployment, response times and day-to-day traffic handling. For ByteDance, that is especially critical because Doubao has seen inference demand grow twelve-fold in eighteen months, a surge that points to rising compute pressure as consumer AI products attract more users and more requests.

If a deal is completed, Iluvatar CoreX would become ByteDance’s third major domestic GPU supplier after Huawei and Cambricon. ByteDance could buy at least 50,000 chips from Iluvatar CoreX this year, and most of them would be used for inference workloads. That scale is notable because it shows Chinese firms are not only looking for backup options, but are actively building a domestic network of suppliers capable of replacing some foreign hardware in high-volume AI services.

Tencent’s existing role as a Kunlunxin customer adds another layer to that shift. It suggests that China’s biggest technology firms are increasingly linking their AI infrastructure around local chipmakers, creating a more connected domestic ecosystem even as geopolitical pressure continues to reshape access to semiconductors. Each new supplier relationship reduces dependence on Nvidia-class hardware and gives Chinese chipmakers a bigger foothold in a market where demand is still expanding quickly.

Baidu’s own plans help explain why ByteDance might look to it as a chip partner. On January 1, 2026, Baidu said it proposed spinning off and separately listing Kunlunxin on the Hong Kong Stock Exchange to showcase the unit’s value, broaden financing channels and align management accountability with performance. In a market defined by export restrictions and rising inference demand, that kind of positioning gives domestic chip vendors a stronger case as China tries to keep scaling its AI economy on its own silicon.