The Shanghai-based company Iluvatar CoreX is in discussions with Chinese tech firm ByteDance to acquire AI chips for inference purposes and is also looking at a comparable agreement with Baidu.
If an agreement is reached, Iluvatar CoreX would become ByteDance’s third significant local provider of graphics processing units (GPUs), following Huawei and Cambricon.
ByteDance, the parent company of TikTok, is reportedly looking into utilizing Baidu's Kunlunxin chips, and Tencent is already a customer of Kunlunxin chips.
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The possible agreements show that Chinese chipmakers' attempts to provide substitutes for foreign AI chips are making progress as Beijing encourages the adoption of domestically produced chips to enhance self-sufficiency in light of US export restrictions on advanced chips.
Chinese GPU and AI chip manufacturers attained almost 41 percent of China's AI accelerator server market last year, significantly undermining Nvidia's previously dominant role in one of its key international markets. Although Nvidia's market share in China has essentially reached zero, as stated by CEO Jensen Huang, Chinese AI chips are expected to be produced in significant volumes in the second half of this year, according to Tencent Chief Strategy Officer James Mitchell in May.
Iluvatar CoreX, a prominent GPU startup in China, is set to deliver a minimum of 50,000 chips to ByteDance this year, with the majority being utilized for inference tasks as ByteDance broadens the clientele for its flagship AI chatbot Doubao.
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Inference tasks focus on responding to questions and differ from AI model training, which typically utilizes the most advanced processors.
COMMERCIAL MILESTONE A partnership with ByteDance, a leading technology firm in China and a significant investor in AI infrastructure, would represent a crucial commercial milestone for Iluvatar CoreX.
So far, the Shanghai-based firm has primarily provided supplies for government procurement projects, according to one source. Iluvatar CoreX, which debuted in Hong Kong in January, announced 1 billion yuan ($148 million) in 2025 revenue, approximately 90 percent derived from GPU sales, as it capitalized on rising demand for local AI hardware.
The Tiangai series chips are designed for AI training, while the Zhikai series focuses on inference tasks.
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Iluvatar CoreX is estimated to achieve a revenue of 3.04 billion yuan ($449.8 million) this year, with total shipments anticipated to rise 139 percent to exceed 100,000 chips, as per a research note from Huatai Securities. The broker assessed the Zhikai inference chips to have an average market price of 12,000 yuan, which is roughly $1,775 per unit.