As ByteDance spends billions on AI, which Chinese chip start-ups stand to gain?

As Chinese technology giant ByteDance accelerates its shift towards domestic chips for artificial intelligence workloads, a few smaller domestic suppliers stand to benefit – if they can deliver at scale amid a void left by Nvidia due to regulatory hurdles.

The Beijing-based owner of TikTok is considering turning to a handful of so-called tier-two chipmakers in China – smaller rivals to Huawei Technologies and Cambricon Technologies – for its cloud infrastructure, according to sources and analysts.

Suppliers in this group, which analysts said included Biren Technology, MetaX Integrated Circuits, Iluvatar CoreX, Moore Threads Technology and Enflame Technology, have been trying to win orders from one of China’s largest cloud service providers as Beijing pushes for greater use of home-grown semiconductors.

In a recent case, ByteDance quietly bought tens of thousands of AI processors from Shanghai-based Iluvatar at a favourable price, according to two sources familiar with the matter.

The company was also in talks with a few other domestic chipmakers for potential orders, the sources said.

ByteDance and Iluvatar did not immediately respond to requests for comment on Thursday.