Chinese tech giant ByteDance is in discussions with Iluvatar CoreX and is also considering a deal with Baidu to secure additional AI chips for inference workloads, according to sources familiar with the matter.

If completed, Iluvatar CoreX would become ByteDance's third major domestic GPU supplier after Huawei and Cambricon, reflecting China's accelerating push toward semiconductor self-sufficiency amid ongoing U.S. export restrictions.

Sources said ByteDance could purchase at least 50,000 AI chips from Iluvatar CoreX this year, primarily to support inference tasks for its rapidly growing AI chatbot, Doubao. The company is also evaluating Baidu’s Kunlunxin chips, which are already being used by Tencent.

The potential agreement would represent a major commercial breakthrough for Iluvatar CoreX, whose business has historically been concentrated in government procurement projects. The Shanghai-based company generated roughly 1 billion yuan in revenue during 2025, with most sales coming from GPU products.

China's domestic AI chip industry continues to gain momentum as local alternatives increasingly replace products from Nvidia. Chinese GPU and AI chipmakers captured nearly 41% of China's AI accelerator server market last year, while Nvidia's share in the country has fallen sharply due to export controls.

Analysts expect Iluvatar CoreX's revenue to nearly triple this year to over 3 billion yuan, supported by projected shipments exceeding 100,000 chips. Following reports of the ByteDance discussions, Iluvatar CoreX shares surged 12% in Hong Kong trading.

The potential deals highlight China's growing ability to build a domestic AI hardware ecosystem, reducing reliance on foreign suppliers while supporting the country's expanding artificial intelligence ambitions.