Qualcomm secures major AI chip supply agreement with ByteDance

Qualcomm has reached an agreement to supply AI data center chips to ByteDance, the Chinese company that owns TikTok.

According to Bloomberg, citing people familiar with the matter, ByteDance will purchase millions of specialized ASIC chips designed to power its AI agent software. For Qualcomm, the deal is a significant milestone in its effort to expand beyond its core smartphone processor business and establish a foothold in the AI infrastructure market.

The agreement is structured in two parts. The first is a direct supply of ASIC chips, with the volume large enough to make ByteDance the first publicly named major buyer of Qualcomm's AI chips. The second part involves manufacturing services, with Qualcomm helping ByteDance bring a custom chip the Chinese company has already designed into volume production. The market response was sharp. Qualcomm shares climbed more than 8% at one point, hitting an all-time high of around $258, and gained roughly 27% over the course of the week.

The deal has been structured around current U.S. export restrictions. The ASIC chips are optimized for inference, the stage at which a trained AI model performs real-world tasks rather than being trained itself. This allows the chips to be designed within performance thresholds that remain below the levels at which exports to China are banned, making them legally sellable to ByteDance. Analysts have nonetheless flagged a risk, noting that export control rules could change and that any deal tied to China remains politically sensitive.