ByteDance in Talks to Buy MediaTek's Custom AI Chips, Could Become Second-Largest ASIC Customer

ByteDance is in advanced talks with MediaTek to purchase data center chips, according to Bloomberg. The deal would secure key compute components for ByteDance and help MediaTek compete with Qualcomm in the data center market.

People familiar with the matter said MediaTek would supply an undisclosed number of application-specific integrated circuits (ASICs), custom-designed chips tailored for the client's platform, to support ByteDance's data center operations. If the deal is completed, ByteDance could become MediaTek's second-largest ASIC customer after Alphabet's Google.

ByteDance has been increasing hardware investment, betting on AI as its next growth engine. Like domestic rivals Alibaba and Tencent, ByteDance cannot purchase the most advanced AI chips from Nvidia and other suppliers, while local chipmakers such as Huawei have struggled to fully meet its computing demand. Bloomberg previously reported that ByteDance reached a similar agreement with Qualcomm earlier in 2026 to purchase millions of AI chips.

For MediaTek, a large contract with ByteDance would help reduce its reliance on the mobile phone business and compete with Qualcomm and Broadcom in data centers, an area where MediaTek has less experience. MediaTek expects AI chip revenue of about $2 billion in 2026 and aims to capture a 15% share of the estimated $80 billion data center chip market in 2027. Nvidia announced in September that it would invest $3.5 billion in MediaTek to support these goals.