ByteDance is planning to purchase more than RMB 40 billion ($5.6 billion) worth of Huawei's Ascend AI chips in 2026, a sharp increase from nearly zero domestic chip procurement this year, with the first batch valued at tens of billions of yuan expected to enter delivery soon.
The massive order is driven by the computing power gap that emerged after Nvidia's H20 chip supply was halted in April 2025 due to U.S. export restrictions, and by explosive growth in token usage across ByteDance's Volcano Engine cloud platform and Doubao AI application, which processed over 30 trillion tokens daily by September.
The deal signals China's accelerating shift toward semiconductor self-sufficiency, with ByteDance deepening cooperation with Huawei to secure domestic computing power for its rapidly expanding AI services that command a 49.2% market share for large model services on China's public cloud.
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