ByteDance develops AI chip, talks with Samsung

China’s ByteDance is developing an artificial intelligence chip and is in talks with Samsung Electronics to manufacture it, two people familiar with the matter said according to Reuters.

ByteDance aims to receive sample chips by the end of March, the people said. It plans to produce at least 100,000 units this year, according to two sources, with output potentially rising to about 350,000 units over time.

The chip targets AI inference tasks, which involve running trained models rather than building them. As a result, it would support ByteDance’s growing use of AI across products such as TikTok, e-commerce services and enterprise tools.

Talks with Samsung also include potential access to memory chips, one of the sources said. Memory components remain in tight supply as companies worldwide ramp up AI infrastructure, making the discussions strategically important.

ByteDance disputed the report. “The information about ByteDance’s in-house chip project is inaccurate,” a company spokesperson said, without providing further details. Samsung declined to comment.

If completed, the effort would mark a milestone for ByteDance, which has invested in chip development for several years. The company began hiring chip engineers in earnest in 2022 as it sought to reduce reliance on external suppliers.

In June 2024, Reuters reported that ByteDance was working with U.S. chip designer Broadcom on an advanced AI processor, with manufacturing expected to be outsourced to Taiwan Semiconductor Manufacturing Co.

Like other global technology groups, ByteDance is exploring custom chips to manage costs and improve performance. Alphabet, Amazon and Microsoft have all developed in-house AI processors to reduce dependence on Nvidia, the dominant supplier of advanced AI chips.

For Chinese technology firms, U.S. export controls on advanced chip sales have added urgency to domestic development. Meanwhile, rivals Alibaba and Baidu have moved ahead. Alibaba last month unveiled its Zhenwu chip for large-scale AI workloads, while Baidu already sells AI chips to external customers and plans to list its chip unit.

The project, codenamed SeedChip, forms part of ByteDance’s broader AI strategy. The company set up its Seed unit in 2023 to develop AI models and applications.

ByteDance plans to spend more than 160 billion yuan ($22 billion) on AI-related procurement this year, with over half earmarked for Nvidia chips and internal development, one source said.