ByteDance is evaluating domestic Chinese AI chips from Iluvatar CoreX and Baidu instead of Nvidia products.

ByteDance, the parent company of TikTok, is reportedly in talks with Iluvatar CoreX and Baidu Inc. (NASDAQ:BIDU) to acquire AI chips. Iluvatar CoreX is projected to deliver at least 50,000 chips to ByteDance this year, primarily for AI inference tasks, as the company broadens the user base of its Doubao chatbot. If the deal goes through, Iluvatar CoreX would become ByteDance's third major domestic GPU supplier, following Huawei and Cambricon, according to a Reuters report on Monday.

This development comes after a report in March suggested that ByteDance planned a major AI infrastructure expansion in Malaysia, underscoring how Chinese tech firms are building computing capacity overseas amid U.S. export restrictions. The project reportedly involved deploying around 36,000 of Nvidia Corp.'s (NASDAQ:NVDA) B200 AI chips through cloud provider Aolani Cloud, with hardware costs potentially exceeding $2.5 billion. However, amid Beijing's push, Chinese GPU and AI chip manufacturers claimed nearly 41% of the domestic AI accelerator server market last year, challenging NVIDIA's long-held dominance in a market that once generated over 20% of its data center revenue.

Meanwhile, according to a Reuters report on Friday, NVIDIA has started marketing its new Vera AI data-center CPU to Chinese customers, with orders now open and availability expected as early as August. The chip is Nvidia's first standalone CPU designed specifically for agentic AI workloads. ByteDance is also considering the use of Baidu's Kunlunxin chips, which are already used by Tencent Holdings (OTC:TCEHY). These potential deals highlight the increasing success of Chinese chipmakers in providing alternatives to foreign AI chips, aligning with Beijing's push for greater self-reliance in advanced chip technology.