Qualcomm is discussing custom AI chip design with ByteDance, and ByteDance is seeking a $20 billion loan for AI infrastructure.

Qualcomm is reportedly in talks to provide chip design services to ByteDance, the parent company of social media platform TikTok. According to people familiar with the matter who spoke to Reuters, the talks are ongoing as Qualcomm seeks to reduce its dependence on the smartphone market, currently its largest source of revenue.

The technology company is discussing the design of custom chips for ByteDance, with the solutions based in part on technology owned by AlphaWave Semi. ByteDance has previously been reported to be developing its own AI chips for inference tasks and custom CPUs.

Should the talks prove successful, ByteDance would become an early customer of Qualcomm's chip design services operations. The US company announced its re-entry into the global chip market last year, returning to CPUs to diversify its offerings and become less reliant on a single area of its business.

In October last year, Qualcomm launched the Qualcomm AI200 and AI250, its next-generation AI inference-optimized solutions for data centers. Both solutions were designed to enable fast GenAI inference at high performance per dollar per watt.

The reports coincide with ByteDance's emergence as a significant AI infrastructure spender. Bloomberg News recently reported that ByteDance is in early talks with banks for its largest offshore loan, roughly US$20 billion.