ByteDance is developing its own central processing units to support its growing Artificial Intelligence infrastructure needs, according to three people familiar with the matter. Surging chip prices and prolonged supply shortages are constraining the company’s expansion plans. The effort reflects a broader shift in the industry toward inference, where Artificial Intelligence models are deployed to perform agentic tasks that place heavier demands on CPUs working alongside Nvidia graphics chips.
The company is targeting deployment of its proprietary CPU in its own servers and data centres to support internal operations, as it prepares a massive rollout of agent-based products including its Coze platform, the first source said. ByteDance has approached several external partners to assist with the effort, and those partners are expected to contribute not only to the chip’s design work but also to help secure manufacturing capacity at foundries, the sources said. The project remains at an early stage, and the sources said the plan is not public.
ByteDance is pursuing two chip architecture tracks for its CPU development, one based on SoftBank-owned Arm and another on the open-source RISC-V instruction set architecture, as it weighs which design best suits its long-term data centre requirements, the sources said. Developing two designs simultaneously is a common hedge for technology giants, allowing them to test options before committing to large-scale manufacturing. The move places ByteDance among a growing group of tech companies that see custom chips as worth the complexity because they can lower costs and better match specific workloads.
The push comes as the CPU market tightens. Intel has warned Chinese customers of server CPU delivery lead times of up to six months, Reuters reported in February. ByteDance currently sources CPUs from Intel and AMD, and they have raised prices significantly, with quarter-over-quarter increases ranging from 10 percent to as much as 35 percent in recent months, two of the sources said, prompting ByteDance to accelerate its push for in-house alternatives. Intel said it had updated prices on some products to reflect sustained demand, increased component and material costs and evolving market dynamics.
Competition in the broader chip market is also intensifying. Global hyperscalers including Alphabet’s Google, Amazon and Microsoft are developing custom CPUs to reduce costs and tailor performance, while Intel and AMD have emerged as stronger challengers to Nvidia. Nvidia is also pushing further into CPUs, and Jensen Huang has said its new Vera central processors could open access to a new US? billion market.
