ByteDance is in advanced talks with MediaTek to buy custom data center chips, according to reports. MediaTek is expected to supply a number of ASIC chips, though the scale has not been disclosed and no deal has been announced.
If completed, ByteDance would become MediaTek's second major ASIC customer after Google. The order would push MediaTek deeper into the data center market, competing with Qualcomm and Broadcom while reducing reliance on smartphone chips. MediaTek expects AI chip sales of about $2 billion in 2026** and aims for **15% of the $80 billion AI chip market in 2027.
ByteDance is ramping up AI infrastructure spending, viewing AI as its next growth engine. Unable to obtain the most advanced AI chips from Nvidia, and with domestic suppliers like Huawei unable to meet all demand, ByteDance is pursuing partnerships with chip designers as an alternative. Earlier this year, it struck a similar deal with Qualcomm for millions of AI chips.
On capex, ByteDance is considering raising 2026 capital expenditure to as much as $70 billion**, more than double the prior year, with a possible increase to **$100 billion in 2027 if conditions allow. The company secured a $30 billion loan in September to support the spending.
As tech companies expand AI training and inference infrastructure, custom ASIC chips are becoming a key direction in the data center chip market. For ByteDance, chip design partnerships broaden its AI compute sources. For MediaTek, a major internet customer could accelerate its data center push.
ICgoodFind Summary: With Nvidia supply constrained, ByteDance is turning to custom ASICs as a compute supplement, while MediaTek uses the potential order to extend from smartphone chips into data centers. AI procurement by internet giants is reshaping chip designers' customer bases.
