But supply constraints created by the same export controls that drove the pivot are already limiting production.

The release of DeepSeek’s V4 model last week has set off a procurement scramble among China’s largest technology companies, with ByteDance, Tencent and Alibaba all reaching out to Huawei about new orders for its Ascend 950 AI chips, according to three people familiar with the matter cited by Reuters. Cloud computing firms and GPU rental services are also moving to secure supply.

The rush is a direct consequence of a strategic decision by DeepSeek to optimise V4 specifically for Huawei’s Ascend processors rather than Nvidia hardware, a significant departure from the Hangzhou-based startup’s earlier models, which relied on Nvidia’s H800 GPUs.

Huawei confirmed day-zero compatibility across its full Ascend SuperNode product line and said the entire range had been adapted for V4 inference.

The pivot carries considerable weight. Until now, Huawei’s Ascend chips had not been validated by a frontier-level AI model at scale. DeepSeek’s endorsement changes that calculus. “Huawei’s Ascend chips are the country’s best homegrown alternative to Nvidia, and supporting DeepSeek V4 shows that top Chinese AI models can now run on Chinese hardware,” said He Hui, director of semiconductor research at Omdia.

The backdrop is US export controls. Nvidia’s H20, until recently the most powerful chip the company was permitted to sell in China has been blocked from import by Beijing following Washington’s tightening of restrictions.

The H200, a more advanced processor, remains caught in regulatory limbo. With Nvidia’s high-end silicon effectively off the table, Huawei has become the only viable alternative for Chinese firms building large-scale AI infrastructure.

The irony is that the same export controls are now constraining Huawei’s ability to meet the demand they helped create. US restrictions on advanced chipmaking equipment limit China’s access to the manufacturing tools needed to produce the Ascend 950 at scale. DeepSeek has acknowledged that supply constraints will persist until production ramps up, though it expects V4-Pro pricing to fall significantly in the second half of 2026 as Huawei scales output.

Shares in SMIC, the Chinese chipmaker that manufactures Huawei’s Ascend processors, jumped 10% in Hong Kong trading following the V4 launch, a market signal that the semiconductor decoupling now has commercial momentum behind it.

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