Chinese technology companies including ByteDance, Tencent and Alibaba are racing to secure Huawei AI chips following increased demand driven by the release of DeepSeek’s latest V4 artificial intelligence model.
Cloud computing companies and GPU rental services also approached Huawei to place new orders for its Ascend 950 chip series, according to Reuters. The spike in orders marks a significant shift in the domestic market’s approach to semiconductor procurement.
DeepSeek V4 Opens New Opportunity
DeepSeek V4, released last week, was optimized specifically for Huawei’s chips, creating a window for the Chinese vendor to expand its in-house semiconductor business. Following the launch, Alibaba Cloud and Tencent Cloud immediately integrated the new model, providing developers with immediate access to both V4-Pro and V4-Flash options.
The model is expected to significantly increase demand for AI workloads and domestic processing capacity. This shift represents a turning point for Huawei, which has faced challenges securing large orders from China’s technology sector in recent years.
Production Constraints and Supply Limitations
Supply remains tight despite the increased orders. Production of domestic chips continues to be constrained by US export restrictions on advanced manufacturing tools, limiting how quickly Huawei can expand its output.
Huawei is expected to ship approximately 750,000 units of the 950PR this year. Full-scale shipments are projected to ramp through the second half of 2026, suggesting a gradual increase in production capacity over the coming months.
Huawei AI Chips Fill Critical Gap
The increased demand for Huawei AI chips reflects broader efforts by Chinese technology companies to reduce dependence on foreign semiconductors. The integration by major cloud providers demonstrates confidence in the capability of domestic chips to support current artificial intelligence applications.
Industry observers note that the success of DeepSeek V4 with Huawei hardware strengthens the case for domestic semiconductor adoption across China’s technology sector. The move could reshape procurement patterns for years to come.
