China’s ByteDance is developing its own artificial intelligence chip and is in discussions with Samsung Electronics to manufacture it, according to people familiar with the matter, in a move that underscores intensifying competition for advanced computing power, Reuters has reported. The initiative reflects the company’s effort to secure access to high-performance processors critical for AI development as global demand strains supply chains.
Sources told Reuters that ByteDance aims to receive initial sample chips by the end of March and plans to produce at least 100,000 units this year, with ambitions to gradually scale output to as many as 350,000 units. The chip is designed primarily for AI inference tasks, which enable trained models to deliver real-time results across applications such as recommendation systems, chatbots, and enterprise tools.
Negotiations with Samsung reportedly include access to scarce memory chip supplies, a particularly valuable component as companies worldwide race to build AI infrastructure. Such access could provide ByteDance with a strategic advantage in an environment where semiconductor shortages and geopolitical restrictions continue to shape the market.
ByteDance, however, disputed aspects of the report, with a spokesperson saying that information about an in-house chip project was inaccurate, without offering further detail. Samsung declined to comment on the discussions.
The reported development would mark a significant milestone for ByteDance, which has explored chip design for several years. Reuters previously reported in June 2024 that the company had partnered with U.S. chip designer Broadcom on an advanced AI processor, with manufacturing expected to be outsourced to Taiwan Semiconductor Manufacturing Company.
Major technology firms globally, including Google, Amazon, and Microsoft, have already introduced custom AI chips to reduce reliance on Nvidia, whose graphics processors remain the backbone of most advanced AI systems. For Chinese technology companies, the urgency is heightened by U.S. export controls that restrict access to cutting-edge semiconductors, accelerating domestic innovation efforts.
ByteDance faces strong regional competition. Alibaba recently unveiled its Zhenwu chip for large-scale AI workloads, while Baidu already sells AI chips to external clients and is preparing to list its semiconductor unit, Kunlunxin. ByteDance’s internal project, reportedly codenamed SeedChip, forms part of a broader strategy to invest heavily across the AI stack, from silicon to large language models.
The company established a dedicated AI initiative known as Seed in 2023 to develop models and expand applications across its businesses, which include short-video platforms, e-commerce, and cloud services. Sources told Reuters that ByteDance plans to spend more than 160 billion yuan, or about $22 billion, on AI-related procurement this year, allocating over half that amount to Nvidia chips, including H200 models, while continuing to advance its own semiconductor capabilities.
At a January staff meeting, ByteDance executive Zhao Qi said the company’s AI investments would support all divisions, while acknowledging that its models still lag behind global leaders such as OpenAI. He pledged sustained backing for AI development as ByteDance attempts to reposition itself in a technology shift that is rapidly reshaping the global digital economy.
