Qualcomm courts ByteDance for custom VPU chips amid data center pivot

Qualcomm's push to design custom VPU chips for ByteDance signals a concrete step into the custom ASIC services market currently dominated by Broadcom and Marvell. A signed deal would give Qualcomm its first flagship data center customer for this division, validating the AlphaWave Semi acquisition as more than a portfolio add-on. For streaming infrastructure, custom VPUs could reduce power consumption and improve encoding efficiency for ByteDance's massive video workloads at TikTok scale. Watch whether ByteDance commits to Qualcomm or opts for its parallel domestic suppliers — Iluvatar CoreX is expected to ship at least 50,000 inference chips to ByteDance this year, per Reuters.

The Qualcomm-ByteDance talks carry a notable contradiction with earlier reporting. Per Bloomberg (May 26, 2026), Qualcomm and ByteDance had already reached an agreement for millions of custom AI ASICs for data center use. The June 24 Reuters report, however, frames the discussions as ongoing and uncertain, with no final agreement and ByteDance retaining the option to pursue other partners. Igor's Lab (June 2026) flagged this discrepancy, suggesting either multiple separate chip programs are in motion or the May report overstated the deal's maturity.

Qualcomm completed its acquisition of AlphaWave Semi in December 2025 for approximately $2.4 billion, per Reuters (June 2025). AlphaWave brings high-speed wired connectivity, SerDes, and chiplet IP — the building blocks needed for large-scale data center custom silicon. CEO Cristiano Amon has confirmed custom ASIC data center shipments have been pulled forward into calendar year 2026, and Qualcomm has announced AI 200 and AI 250 inference rack systems targeting availability in 2026 and early 2027, respectively (per Igor's Lab, June 2026).

On the ByteDance side, the supplier diversification is extensive. Reuters (June 15, 2026) reported that Iluvatar CoreX is expected to ship at least 50,000 inference chips to ByteDance in 2026, with the Shanghai-based GPU maker's revenue projected to reach 3.04 billion yuan (~$450 million) this year, up from 1 billion yuan in 2025, per Huatai Securities. ByteDance is also evaluating Baidu's Kunlunxin chips, which would give it a fourth domestic GPU supplier alongside Huawei, Cambricon, and Iluvatar CoreX.

Qualcomm's broader acquisition spree adds further context. Bloomberg (June 22, 2026) reported Qualcomm is nearing a ~$4 billion deal for Modular Inc., a startup whose platform lets developers deploy AI models across different chip architectures. The Information (June 15, 2026) reported parallel talks to acquire Tenstorrent, the Jim Keller-led AI chip startup, at a valuation between $8 billion and $10 billion. If both close, Qualcomm would commit over $14 billion to AI silicon within weeks, on top of the AlphaWave deal.