Chinese technology company ByteDance is in discussions with Shanghai-based Iluvatar CoreX to purchase AI chips primarily for inference workloads, according to multiple sources [1, 2]. The deal would mark Iluvatar CoreX’s first major commercial customer outside government projects and make it ByteDance’s third significant domestic GPU supplier alongside Huawei and Cambricon [1, 2].
ByteDance is also exploring a similar potential agreement with Baidu to access Baidu’s Kunlunxin AI chips, which Tencent already uses for its own AI operations [1, 2]. The details of both possible deals remain incomplete and subject to change as negotiations continue [1, 2].
Iluvatar CoreX, which went public in Hong Kong in January 2026, reported 1 billion yuan (~$148 million) in revenue for 2025, with about 90% deriving from GPUs [1]. Until now, Iluvatar has principally supplied government procurement contracts but expects to ship at least 50,000 AI chips to ByteDance this year, mostly supporting ByteDance’s AI chatbot Doubao for inference tasks [1, 2]. Inference workloads focus on answering queries and require less power than AI training, which demands more intensive chips [1, 2].
Domestic Chinese GPU and AI chipmakers captured nearly 41% of China’s AI accelerator server market in 2025, carving away Nvidia’s previous dominance [1, 2]. Nvidia CEO Jensen Huang acknowledged that Nvidia’s market share in China has "effectively fallen to zero" by mid-2026 [1, 2].
Tencent’s chief strategy officer James Mitchell said Chinese AI chips would become available in large volumes in the second half of this year [1, 2]. This influx aligns with China’s growing push for domestic alternatives to foreign AI hardware.
If concluded, the deal with ByteDance would be a significant commercial milestone for Iluvatar CoreX while enabling ByteDance to further develop its AI services using domestic supply chains. The companies are expected to finalize agreements as the chip shipments ramp up through 2026 [1, 2].
