Qualcomm has reached a deal with TikTok’s parent company, ByteDance, to supply agentic chips to the social media company, Bloomberg News reported Tuesday, citing people familiar with the matter.
Shares of the San Diego-based chipmaker rose nearly 5% on the news.
ByteDance is expected to buy millions of Qualcomm chips — known as application-specific integrated circuits — to help support the social media company’s AI agent software, the report said.
The Chinese technology company would become one of the first major customers for Qualcomm’s AI-focused application-specific integrated circuits and would be a big win for the chipmaker, which is trying to expand from smartphone processors into AI infrastructure, the report said.
For now, Qualcomm has a single 200-megawatt AI data center in Saudi Arabia.
Qualcomm did not immediately respond to a request for comment.
The deal will help ByteDance turn an already completed in-house chip design into a semiconductor that is ready for production, according to the report.
Qualcomm CEO Cristiano Amon said last month that the company is working with customers on three kinds of chips: central processing units (CPUs), accelerators for inference, and custom chips called ASICs. He hinted at a hyperscaler deal at the time, and analysts eagerly questioned the executive for a name during an earnings conference call, but Amon didn’t divulge any details.
“We’re thinking about a multigenerational engagement. But that’s all we can say at this point,” Amon said during the earnings call.
Seeing demand surge with no signs of slowing, investors are rushing into chip companies, expecting the need for semiconductors to grow exponentially.
Big tech companies — like Amazon, Google, OpenAI, Anthropic, Meta, and other hyperscalers — spent $27 billion to $37 billion buying AI chips in 2024, according to Hong Kong-based Aletheia Capital. That number is expected to jump to $90 billion to $140 billion by 2026.
Shares in Qualcomm closed Tuesday at $248.82, up $10.66.