ByteDance in Talks to Buy MediaTek AI Chips

According to reports, ByteDance is in advanced discussions with MediaTek to purchase custom chips for its data centers. People familiar with the matter said MediaTek is expected to supply ByteDance with a certain number of application-specific integrated circuits (ASICs), although the volume has not been disclosed. Neither company has officially announced an agreement.

If the deal goes ahead, ByteDance could become MediaTek's second major ASIC customer after Google. The potential partnership would help MediaTek expand its data center business, compete with Qualcomm and Broadcom, and reduce its reliance on smartphone chip sales. MediaTek expects its AI chip revenue to reach approximately $2 billion in 2026 and aims to capture 15% of the projected $80 billion AI chip market in 2027.

ByteDance is increasing investment in AI infrastructure as it views artificial intelligence as a key driver of future growth. Facing limited access to the most advanced AI chips from companies such as Nvidia, while domestic providers such as Huawei are not yet able to meet all its requirements, ByteDance is exploring alternative options through partnerships with chip designers. Earlier this year, the company reached a similar procurement arrangement with Qualcomm, reportedly planning to purchase millions of AI chips.

ByteDance is also considering raising its capital expenditure for 2026 to as much as $70 billion, more than double the previous year's level. If economic and business conditions permit, its capital expenditure could increase further to $100 billion in 2027. In September, the company also secured a $30 billion loan to support its spending plans.

As technology companies continue to invest heavily in AI model training and inference infrastructure, custom ASICs are becoming an increasingly important part of the data center chip market. For ByteDance, partnerships with chip designers could diversify its AI computing resources and help meet growing demand. For MediaTek, securing a major order from a leading internet company could accelerate its expansion into the data center market and strengthen its position in the AI semiconductor industry.