TikTok-owner ByteDance is talking with U.S. tech firm Broadcom about a possible TSMC-made AI processor

The U.S. chip designer and Beijing-based ByteDance have talked about a 5-nanometer purpose-built chip, according to a person familiar with the discussions. No deal has yet been reached between the two companies, and Broadcom already supplies an older-generation 7nm AI processor for use in ByteDance’s data centers, the person said, asking not to be named as the information is private.

The proposed chip would comply with U.S. trade restrictions on China, Reuters said in an earlier report citing anonymous sources. The two companies’ existing business relationship largely revolves around server and networking gear, and Broadcom has cited ByteDance as a customer in its press releases.

In March, Broadcom told investors that it added a new customer for its consumer AI accelerator business and it will be shipping products to that company in the next few months, without providing a name.

Should the pair reach a deal, the customized chip would be made by Taiwan Semiconductor Manufacturing Co., Reuters reported. The tie-up between the owner of TikTok and two global semiconductor firms is unusual given Washington is actively trying to curtail Chinese chipmaking ambitions through a series of broad production and export curbs.

The arrangement is intended to ensure a steady supply of chips to ByteDance, which operates the world’s biggest short video platform as well as Chinese services Douyin and Toutiao. ByteDance’s Doubao became China’s most popular AI chatbot this year.

ByteDance’s global competitors, from Meta Platforms Inc. and Microsoft Corp. to Alphabet Inc.’s Google, are all developing or already using their own bespoke chips for AI tasks. The TikTok parent will be trying to keep pace with those U.S. rivals, having made AI a priority this year. 

Representatives for ByteDance, Broadcom and TSMC did not respond to requests for comment.