ByteDance has struck a deal with Qualcomm to buy millions of custom AI ASIC chips, turning its in-house chip designs into mass-produced silicon for the Doubao AI agent. The agreement is carefully engineered to stay within the bounds of US export controls: Qualcomm will have the chips fabricated by TSMC and other foundries, but only if the compute performance remains below the legal threshold, allowing both companies to avoid triggering the ban on high-end AI chips.
ByteDance is ramping up data center spending, raising its AI infrastructure budget by 25 percent to 200 billion yuan (around $29.4 billion). The Qualcomm order helps diversify away from Nvidia's expensive GPUs. For Qualcomm, it's a breakthrough into the AI infrastructure business, moving beyond smartphone processors. ByteDance becomes one of Qualcomm's first major custom ASIC customers. News of the deal sent Qualcomm's stock up 8.3 percent during trading, hitting an all-time high. CEO Cristiano Amon hinted at such a deal during the company's Q2 earnings call in April, saying Qualcomm was in deep discussions with multiple large customers for AI data center chips.