ByteDance is in advanced talks to purchase custom data-centre chips from MediaTek, Bloomberg reported. The agreement would make the TikTok owner a major customer of MediaTek's application-specific integrated circuit (ASIC) business — potentially its second-largest after Google. The chips would support ByteDance's data-centre operations as the company expands its AI infrastructure. The volume under discussion has not been disclosed, and the agreement has yet to be finalised.

ByteDance is seeking additional chip suppliers as US export restrictions limit access to Nvidia's most advanced AI processors. Custom silicon designed for its own workloads offers a route to scale AI infrastructure within those constraints.

For MediaTek, best known for its smartphone chips, the potential deal would expand its data-centre business beyond its traditional strength — an increasingly lucrative market as cloud providers and AI companies turn to custom accelerators alongside merchant GPUs.

Background and analysis. Export controls have accelerated a structural shift in the AI chip market. Chinese internet giants have been investing in in-house and partner-designed AI silicon — Alibaba, Baidu and others have pursued custom chip programmes — while overseas cloud providers have long run custom ASICs alongside Nvidia hardware, Google's TPU being the prominent example. MediaTek's track record as an ASIC partner to major US customers makes it a credible counterparty in this ecosystem.

Our take. Even if finalised, volumes are unlikely to rival Nvidia's shipments — this is diversification, not displacement. But the direction is clear: as AI infrastructure spending grows and supply chains fragment, custom silicon is moving from niche to mainstream. Watch for the deal's final terms, and whether other Chinese AI players follow with similar arrangements.

Source: TechNode, "ByteDance nears deal to buy MediaTek's custom AI chips for data centers", 15 October 2026 (citing Bloomberg). https://technode.com/2026/10/15/bytedance-nears-deal-to-buy-mediateks-custom-ai-chips-for-data-centers/