Huawei vs. Nvidia: why ByteDance and Alibaba are buying Huawei

Major Chinese technology companies are racing to secure Huawei’s latest artificial intelligence chips following the release of DeepSeek’s new V4 model, according to sources familiar with the matter.

Demand for Huawei’s Ascend 950 AI processors has reportedly surged as large internet firms, including ByteDance, Tencent and Alibaba, seek new orders to support expanding AI workloads. The spike in interest comes shortly after DeepSeek unveiled its V4 model, which is optimized to run on Huawei’s domestic chip architecture, News.Az reports, citing Reuters.

Industry sources say cloud computing providers and GPU rental firms are also attempting to secure supply, as competition for high-performance AI hardware intensifies across China’s tech sector.

The Ascend 950 series has gained attention for its performance improvements and compatibility with advanced AI processing techniques. While it is seen as a significant step forward for China’s semiconductor ambitions, it still trails Nvidia’s most advanced global chips, highlighting ongoing technological gaps despite rapid progress.

The surge in demand reflects a broader shift toward domestically developed AI infrastructure, driven in part by continued U.S. export restrictions on cutting-edge semiconductor technology. These limits have pushed Chinese companies to rely more heavily on local suppliers such as Huawei.

DeepSeek’s V4 release has further accelerated this trend. The model, offered in multiple versions and designed for large-scale AI applications, has been rapidly integrated into major cloud platforms, expanding access for developers and increasing computing demand.

Alibaba Cloud and Tencent Cloud both made the model available on the day of its launch, signaling strong industry alignment around the new system. This immediate deployment has contributed to a sharp rise in AI traffic and, in turn, hardware requirements.

Despite strong interest, supply constraints remain a challenge. Production of Huawei’s newest chips is still scaling, and output is expected to lag behind demand in the near term. Analysts say this imbalance could persist as global restrictions on semiconductor manufacturing equipment continue to limit China’s production capacity.

Huawei is expected to ramp up shipments over the coming years, but industry sources note that competition for early supply is already intense as China’s AI race accelerates.

News.Az 

By Aysel Mammadzada