ByteDance Nears MediaTek Deal for Custom AI Data Center Chips, Bloomberg Reports

TikTok’s parent company ByteDance is in final talks with Taiwan’s MediaTek to buy custom chips for its data centers, Bloomberg reported on Thursday, in a deal that would make the Chinese tech giant the chipmaker’s second major customer for such silicon after Google.

The talks involve application-specific integrated circuits, or ASICs, designed specifically for ByteDance’s data center workloads. Neither company has commented publicly, and Bloomberg reported that the arrangement has not been finalized, with pricing, volumes, and delivery schedules undisclosed.

For MediaTek, better known for powering smartphones, the deal would mark a major step beyond mobile processors into the custom data center market, putting it in direct competition with Qualcomm and Broadcom.

MediaTek already supplies ASICs for Google’s tensor processing units, and ByteDance would become its second anchor tenant in custom silicon.

MediaTek has been pushing hard into data center AI accelerators, and the timing is not accidental. The company expects its first data center AI accelerator ASIC to enter mass production in the fourth quarter of 2026, and it is targeting roughly $2 billion in AI chip sales this year.

Looking further ahead, MediaTek is chasing a 15 to 20 percent share of an $80 billion serviceable market next year, according to Bloomberg. Landing ByteDance would give that ambition a huge credibility boost, and Wall Street noticed: the report immediately put Qualcomm, Broadcom, and Nvidia shares in focus on Thursday.

The deal is also a competitive signal. ByteDance reportedly agreed earlier this year to buy millions of AI chips from Qualcomm, and its parallel ASIC supply lines reportedly include Iluvatar CoreX. MediaTek now appears close to joining that lineup.

The driving force is necessity. ByteDance has designated artificial intelligence as a future growth driver, but US export controls have made it hard to secure cutting-edge AI chips. Domestic suppliers like Huawei have helped cover the shortfall, but they have struggled to meet the full demand of China’s biggest tech companies.

Custom ASICs are the industry’s preferred workaround. Unlike general-purpose GPUs, they are tailored to a customer’s specific workloads and tend to cost less to run at scale.

Amazon, Google, and other hyperscalers have already gone down this path; ByteDance moving more workloads to custom silicon could reduce its reliance on Nvidia GPUs, adding fresh pressure on the GPU giant even as export restrictions already limit Chinese sales.

The scale of the spending is staggering. Bloomberg reported that ByteDance is considering capital expenditure of up to $70 billion this year on data centers and AI infrastructure, more than double last year’s total, with outlays potentially reaching $100 billion in 2027. The company secured a $30 billion loan in September to help fund the expansion.

If the MediaTek deal closes, it would confirm that custom silicon, not just raw compute, is now at the center of China’s AI infrastructure race, with Taiwan’s chip designers increasingly caught between Beijing’s demand and Washington’s export rules.