Huawei is on track to grow its AI chip business by at least 60% this year, with revenue projected to reach roughly $12 billion in 2026, up from $7.5 billion in 2025, according to people briefed on the company's internal forecasts. The surge is being driven by a sudden scramble among China's largest cloud and internet players to secure Huawei's new Ascend 950PR processor, after DeepSeek released its V4 model optimized for Huawei silicon.
The Financial Times first reported the revenue figure, citing people familiar with the matter. Reuters separately reported that within days of the DeepSeek V4 launch, ByteDance, Alibaba, and Tencent all reopened conversations with Huawei about fresh orders, while smaller cloud and GPU rental operators are pushing to be added to the queue. ByteDance alone has reportedly committed more than $5.6 billion to Ascend purchases this year.
DeepSeek V4 reshaped the demand curve
DeepSeek's decision to optimize V4 specifically for Huawei's Ascend 950 series marks a turning point in China's effort to build a domestic AI stack independent of U.S. semiconductors. Until now, most Chinese frontier labs designed primarily around Nvidia tooling and ported to local chips as a backup. V4 reverses that order, treating Huawei silicon as a first-class target.
The 950PR, which entered mass production in April with full-scale shipments expected in the second half of 2026, is designed to be more CUDA-compatible than prior Ascend generations and reportedly delivers better response speeds than Nvidia's H20—the chip Washington still permits Nvidia to sell into China. It trails Nvidia's H200 in absolute performance, but the combination of price, availability, and DeepSeek's V4 optimizations is enough to tip near-term procurement decisions.
Production and the next chip
Huawei is targeting shipments of about 750,000 units of the 950PR this year. The company has also told customers it plans to launch an upgraded variant, the Ascend 950DT, in the fourth quarter, extending its roadmap further into 2027. Even at those volumes, supply remains tight: U.S. export controls on advanced chipmaking equipment have limited China's domestic foundry capacity, meaning Huawei cannot satisfy all current Ascend demand even if it wanted to.
Market implications
Bernstein analysts estimate that under the current export-control regime, Nvidia's share of the Chinese AI accelerator market could fall to roughly 8%, with Huawei climbing to about 50%. If those projections hold, Huawei's 2026 numbers would represent more than just a revenue milestone—they would be the first hard evidence that a parallel, China-only AI hardware stack is forming around domestic models, domestic accelerators, and domestic clouds.
For Nvidia, which still derives a meaningful portion of its data-center revenue from China, the loss of incremental orders to Huawei this year raises the stakes around any future loosening or tightening of U.S. export rules. For Huawei, the harder challenge will be whether it can convert short-term scramble buying into sustained, multi-year purchase commitments before Washington narrows the window further.
