China’s ByteDance is developing an artificial intelligence chip and is negotiating with Samsung Electronics to manufacture the component, two people familiar with the matter said, as TikTok’s parent company seeks to secure supplies of advanced processors.
ByteDance aims to receive samples of the chip by the end of March, the sources said. The company plans to produce at least 100,000 units of the processor, designed for AI inference tasks, later this year, according to one of them and a third person interviewed by the agency. One of the sources added that the company intends to gradually increase production to 350,000 units.
Talks with Samsung include access to the supply of memory chips, an item in severe shortage amid the buildout of global AI infrastructure, making the deal particularly attractive, one of the sources said.
Opportunity with security!
A ByteDance spokesperson said in a statement that information about the company’s internal chip design is inaccurate, without elaborating. Samsung declined to comment.
The project would represent a milestone for ByteDance, which has been looking to develop chips to support its AI workloads for years. Efforts in the area date back to at least 2022, when the company intensified hiring of semiconductor professionals. Reuters revealed in June 2024 that ByteDance was working with North American Broadcom on an advanced AI processor, whose manufacturing would be outsourced to Taiwanese TSMC.
Global technology giants such as Alphabet (Google), Amazon and Microsoft have also created their own AI chips to reduce dependence on Nvidia, a leading supplier of advanced processors used in AI models. In the case of Chinese companies, US export controls on cutting-edge chips increase the urgency to develop local solutions.
Although it has not yet launched its own chip, ByteDance sees rivals such as Alibaba and Baidu moving forward. Alibaba recently introduced Zhenwu, aimed at large-scale AI workloads, while Baidu sells chips to external customers and plans to soon list its Kunlunxin semiconductor unit.
The chip project, codenamed SeedChip, is part of ByteDance’s broader strategy to direct resources to developing AI — from semiconductors to large language models —, betting that the technology will transform businesses ranging from short videos to e-commerce and corporate cloud. The company created the Seed unit in 2023 precisely to develop AI models and their applications.
According to one of the sources, ByteDance plans to spend more than 160 billion yuan ($22 billion) on AI-related acquisitions this year, allocating more than half of the amount to purchasing Nvidia chips, including H200 models, and advancing the internal chip.
Continues after advertising
In a general meeting with employees in January, executive Zhao Qi stated that the investment in AI will benefit all of the company’s divisions, according to a fourth source. Zhao, responsible for the Doubao chatbot and its international version, Dola, acknowledged that ByteDance’s models still lag behind global leaders like OpenAI, but pledged to maintain support for AI development through 2026, this person said.
