TikTok owner ByteDance to join AI chip race with its custom in-house CPUs

ByteDance is developing its own CPUs to address growing AI infrastructure demands amid rising chip prices and supply shortages. Essentially, ByteDance, the owner of TikTok, has seen how much money hardware companies are making and now wants a slice of the AI pie, and/or it doesn't want to keep relying on third parties to provide it with the necessary hardware.

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The company, best known for TikTok, is reportedly designing custom silicon to power expanding AI operations. Sources from Reuters state the chips will be used for AI inference tasks, with production potentially starting this year. The company is said to be in talks with Samsung and TSMC for manufacturing, with at least 100,000 units expected in 2026.

If accurate, the move signals a major pivot into hardware, positioning ByteDance alongside other tech firms like Google and Meta, which have also begun developing in-house AI accelerators intended to assist the demand for as many AI-capable chips as possible.

The decision is driven by tightening global chip supply and rising third-party silicon costs. AI is gobbling up hardware at such a rate that component manufacturers are switching or even abandoning entire markets to pursue the seemingly endless supply of money from AI companies. Component manufacturers selling large quantities to AI companies have choked supply, driving consumer prices through the roof, particularly for RAM and SSDs.

With its chip R&D team now over 1,000 employees, ByteDance is doubling down on AI hardware. The firm aims to reduce dependency on external suppliers and gain more control over its AI performance and scalability, which is undoubtedly part of China's overarching plan to reduce reliance on US-supplied hardware - basically NVIDIA.