ByteDance nears decision: could become MediaTek's second major ASIC customer after Google
Bloomberg reports that the TikTok owner is close to a deal for custom ASIC chips from MediaTek — an arrangement that would make the company MediaTek's second major ASIC customer after Google. The news lands amid US export restrictions and ahead of a reported investment plan of up to $70 billion this year.
ByteDance is, according to Bloomberg, in advanced negotiations with MediaTek for a supply of custom chips intended to help power the company's data centers. The information comes from sources "familiar with the matter," and neither party has confirmed the talks: ByteDance had no immediate comment, while MediaTek representatives declined to comment. That means terms, chip volumes, and timeline currently have no public basis.
What the reported deal would cover
What is being reported is a deal for so-called ASICs — specially designed chips built for a specific customer's workloads, rather than general-purpose GPUs. If the deal goes through, the company behind TikTok would become MediaTek's second major ASIC customer after Alphabet-owned Google, Bloomberg writes. MediaTek is already a central supplier to Google's tensor processing units (TPUs), meaning the Taiwanese company has documented experience with precisely this type of large-scale project.
For MediaTek, the report is also a moment in its competition with Qualcomm and Broadcom for the data center market. Bloomberg describes the deal itself as something that would "help the Taiwanese chipmaker compete with Qualcomm."
Why the export restrictions are driving this
The background is the US export restrictions that exclude Chinese companies from the most advanced AI chips, including Nvidia's GPUs. Bloomberg explains that partnerships with chip designers are permitted under current rules, as long as the AI computing power a Chinese company seeks does not exceed a certain threshold. It is this opening that ByteDance is now reported to be exploiting.
Earlier this year, the company entered a similar deal with Qualcomm for the purchase of millions of AI chips, according to a previous Bloomberg report cited in the article. The MediaTek deal would thus be a second leg of the same strategy: building AI capacity on specially designed silicon that stays within the rules, rather than depending on top-heavy GPU imports.
An important caveat: No source verifies that the specific MediaTek arrangement meets the export control threshold — that remains an open question.
The scale behind it: ByteDance's investment plans
Bloomberg writes that the Beijing-based company is considering raising capital expenditures to as much as $70 billion this year — more than double last year's total — to build out data centers and other AI infrastructure. The amount could rise to $100 billion in 2027, if economic and business conditions allow. In September, the company secured a $30 billion loan to finance the spending.
A secondary source, Crypto Briefing, states that the company has raised its AI infrastructure guidance for 2026 to a range of 160–200 billion yuan, with half potentially going to processors. The relationship between these figures and the dollar-based figures from Bloomberg is not clarified in the sources, so the different frameworks should be read as partially overlapping projections of the same investment drive.
MediaTek's side of the table
For MediaTek, the reported talks are a further rollout of a data center strategy the company has already quantified. The company expects AI chip sales of around $2 billion this year, and aims to take 15 percent of a market worth $80 billion next year, according to Bloomberg. In September, Nvidia announced it is investing $3.5 billion in Hsinchu-based MediaTek — a capital commitment Bloomberg describes as something that lifts those ambitions.
A potential ByteDance deal would mean a named, major Chinese customer pillar under the same strategy — alongside the existing TPU collaboration with Google.
What it could mean for the market
This is analysis, not confirmed fact: As Stocktwits via Yahoo Finance writes, a shift by ByteDance toward its own ASICs could pressure Nvidia's GPU sales, by reducing the company's dependence on GPUs — even as export restrictions are already forcing Chinese companies to look for alternatives. The same source points out that Qualcomm, Broadcom, and Nvidia are all in focus as competitors and affected parties in this picture.
It is worth keeping this separate from the news portion: None of the market reactions or competitive scenarios have been confirmed by the parties themselves, and no deal has yet been publicly announced.
What is still missing
There are three open questions after the report. First, the terms: pricing, volumes, and duration are not known. Second, the scope: It is unclear what share of ByteDance's data center computing power the MediaTek chips are meant to cover, or how they relate to the Qualcomm deal. Third, the rules: Whether the arrangement stays under the referenced computational threshold in the US export rules has not been confirmed. Until either party comments, the story stands as a source-based picture of a possible deal — not a signed one.