ByteDance, the owner of TikTok, is in active discussions to procure artificial intelligence graphics processing units (GPUs) from Shanghai-based Iluvatar CoreX (ticker 9903) and is also evaluating a similar supply arrangement with Baidu's Kunlunxin chips (ticker 9888), according to people familiar with the negotiations.
Should a deal with Iluvatar be reached, the company would join Huawei and Cambricon Technologies (ticker 688256) as ByteDance's third principal domestic GPU supplier. The move highlights efforts within China to foster a self-reliant AI semiconductor supply chain amid U.S. limits on exports of advanced chips.
Sources say ByteDance's primary interest in Iluvatar's products is for inference workloads. The company is considering an order of at least 50,000 units this year as it expands the Doubao AI chatbot business. The discussions also encompass Baidu's Kunlunxin line, which already counts Tencent among its customers.
Those familiar with the talks cautioned that negotiations are ongoing and that commercial terms could shift before any agreement is finalized. If consummated, a supply deal would represent a significant commercial milestone for Iluvatar CoreX, which has, to date, largely been involved in projects supported by government initiatives.
The market reacted to the report: shares of the Hong Kong-listed Iluvatar CoreX jumped as much as 12% on the news before giving back most of those gains by midday. Baidu's shares showed a modest decline in the same trading period.
ByteDance's evaluation of multiple domestic GPU vendors and the possibility of a substantial order underline the company's efforts to secure compute capacity for its AI services. The outcome of these supplier talks could influence commercial dynamics among Chinese chipmakers and buyers as developers seek hardware for inference workloads linked to conversational AI products.
Summary: ByteDance is negotiating purchases of AI GPUs from Iluvatar CoreX and is also considering Baidu's Kunlunxin chips for inference work tied to its Doubao chatbot expansion. Iluvatar could supply at least 50,000 units this year if talks conclude successfully. Discussions remain ongoing and subject to change, and Iluvatar's shares briefly spiked on the news.
Key details:
- ByteDance is in discussions with Iluvatar CoreX and is evaluating Baidu's Kunlunxin chips.
- Iluvatar could become ByteDance's third domestic GPU supplier after Huawei and Cambricon Technologies (ticker 688256).
- Potential purchase size: at least 50,000 units this year for inference workloads supporting the Doubao AI chatbot, per the report.