Qualcomm Shares Jump 8% After TikTok Owner ByteDance Reportedly Orders Millions of Its Custom AI Chips

TikTok's parent company, ByteDance, is said to have placed a massive order for custom AI chips from Qualcomm, sending the San Diego chipmaker's shares to a record high in a single trading session. ByteDance, which also operates Douyin and China's most popular AI chatbot Doubao, is set to become one of Qualcomm's first major customers for its new line of AI-focused chips, according to people familiar with the matter.

The deal covers millions of application-specific integrated circuits, ASICs, built specifically to run ByteDance's AI agent software across its platforms. Beyond the chip supply, a separate source told Bloomberg that Qualcomm would also help ByteDance take an in-house chip design the company has already completed and bring it into full production, making this more than a standard supply agreement.

Known mostly for making Snapdragon processors inside Android smartphones, this reported deal marks Qualcomm's most publicly visible step yet into the AI data center market, where Nvidia has dominated for years. CEO Cristiano Amon told investors last month that the company was in active "engagement" with potential customers for its new chip products, without naming anyone. The ByteDance report put a name to that pipeline for the first time.

Wall Street responded immediately. Shares surged as much as 8.3% intraday on the news, May 26, hitting $247.91, before closing the day up 6.66%. The two companies have not made an announcement on the deal.