Qualcomm is negotiating to design custom chips for ByteDance, the parent company of TikTok. The deal would mark another step in Qualcomm’s pivot away from its smartphone business and deeper into the AI data center market.
The discussions center on developing application-specific integrated circuits, or ASICs, which are chips built for a single purpose rather than general computing. Instead of selling ByteDance off-the-shelf processors, Qualcomm would build silicon tailored specifically to the computational demands of ByteDance’s AI-powered recommendation engines and software platforms.
From smartphones to server rooms
This isn’t Qualcomm’s first deal with ByteDance. In May 2026, the two companies signed a supply agreement in which ByteDance committed to purchasing millions of Qualcomm’s AI-focused ASICs designed for data center use. Qualcomm’s stock surged nearly 5% on that news alone.
The current negotiations go further. Rather than just selling existing chip designs, Qualcomm would now provide full custom chip-design services. The custom ASICs could incorporate technology from AlphaWave Semi, a company Qualcomm acquired in 2025 that specializes in high-speed connectivity intellectual property, a critical ingredient for data center chips that need to move massive amounts of data between processors.
