ByteDance, the parent company of TikTok, and US chip designer Broadcom are reportedly in talks about creating an advanced AI processor.

According to Bloomberg, ByteDance and Broadcom have discussed collaborating on a specialized 5-nanometer AI chip. This new chip would support ByteDance’s AI technology development efforts. Currently, Broadcom supplies ByteDance with a 7-nanometer AI processor for its data centers, but no agreement for the new chip has been finalized.

The proposed 5-nanometer chip would adhere to US trade restrictions on China, as noted in a Reuters report that cited anonymous sources. The existing relationship between ByteDance and Broadcom primarily involves server and networking equipment, and Broadcom has mentioned ByteDance as a customer in its communications.

In a March update to investors, Broadcom revealed it had secured a new client for its consumer AI accelerator products, with plans to ship these products in the coming months, though the customer was not named.

If an agreement is reached, the custom chip would be manufactured by Taiwan Semiconductor Manufacturing Company (TSMC), as reported by Reuters. This potential partnership between ByteDance and two major semiconductor companies is notable, especially as the US imposes stringent measures to limit China’s chipmaking capabilities.

This collaboration aims to ensure ByteDance has a reliable chip supply. ByteDance, which operates the globally popular TikTok platform as well as Chinese services Douyin and Toutiao, saw its AI chatbot Doubao become China’s most popular this year.

Globally, ByteDance’s competitors, including Meta Platforms Inc., Microsoft Corp., and Alphabet Inc.’s Google, are developing or already utilizing custom AI chips. By pursuing this collaboration, ByteDance seeks to remain competitive with these US tech giants, having prioritized AI development this year.

Representatives for ByteDance, Broadcom, and TSMC have not responded to requests for comment.