ByteDance is reportedly developing its own specialized artificial intelligence (AI) chips to insulate itself from tightening trade restrictions and soaring infrastructure costs.

The Beijing-based parent company of TikTok is in advanced negotiations with Samsung Electronics to manufacture the hardware, according to a Reuters report, citing sources familiar with the project.

The initiative, codenamed SeedChip, represents a significant step in ByteDance’s hardware aspirations. The company plans to receive its first sample chips by the end of March, with an aggressive production roadmap targeting 100,000 units in 2026. Sources said the company could eventually scale production to as many as 350,000 units annually.

The move comes as Chinese tech giants face increasing difficulty in procuring high-end silicon. U.S. export controls have limited the flow of the most advanced processors from industry leader NVIDIA Corp. to China, forcing domestic firms to seek internal solutions. While ByteDance has reportedly placed massive orders for NVIDIA’s H200 chips as a short-term fix, SeedChip represents a long-term play for silicon sovereignty.

By designing its own chips specifically tailored for AI inference, the process of running trained models to make predictions or generate content, ByteDance joins a gilded club of global hyperscalers like Google, Amazon.com Inc., and Microsoft Corp.

The choice of Samsung as a potential foundry partner is strategic. Beyond manufacturing logic chips, ByteDance is reportedly seeking a stable supply of high-bandwidth memory. These memory components are currently in extreme shortage globally, yet they are essential for the massive data throughput required by modern large language models (LLMs).

Despite the detailed reports, ByteDance has officially denied the accuracy of the project descriptions, and Samsung has declined to comment. However, industry insiders point to ByteDance’s aggressive hiring of semiconductor talent since 2022 and a previous collaboration with U.S.-based Broadcom Inc. as evidence of a sustained hardware strategy.

ByteDance dominates the global short-video market, but it is playing catch-up in the domestic AI hardware race. Rivals Alibaba and Baidu have already deployed proprietary chips, with Alibaba recently unveiling its Zhenwu processor and Baidu successfully commercializing its Kunlunxin.

ByteDance is backing its ambitions with massive capital. The company plans to spend more than $22 billion on AI-related procurement this year alone. During a January all-hands meeting, executive Zhao Qi reportedly told employees that while ByteDance’s models like the Doubao chatbot currently lag global leaders like OpenAI, the company is committed to a “total war” on AI development.

By integrating its own silicon, ByteDance hopes to lower the massive operational costs of its Doubao and Dola AI apps, ensuring that the seed of its AI future isn’t reliant on a volatile global supply chain.