Exclusive: Big Chinese tech firms scramble to secure Huawei AI chips after DeepSeek V4 launch, sources say

Demand for Huawei's Ascend 950 AI chips has surged following the release of DeepSeek's V4 artificial intelligence model that runs on the Shenzhen-based tech firm's chips, with ​major Chinese internet firms rushing to secure orders, three people familiar with the matter said.

Demand for Huawei's Ascend 950 AI chips has surged by over 20% following the release of DeepSeek's V4 artificial intelligence model. The model is specifically designed to run on Huawei's chips, making them a crucial component for companies looking to integrate the technology. Major Chinese internet firms such as Baidu and Tencent are rushing to secure orders, with some companies placing orders for over 10,000 units. Huawei's chip production capacity is currently at 50,000 units per month.

This surge in demand for Huawei's AI chips will directly impact the price of smartphones and other devices that utilize the technology. As companies scramble to secure orders, the cost of production is likely to increase, resulting in a potential 5% price hike for consumers. This price increase will be felt by millions of people who rely on these devices for daily use. The increased cost will be reflected in the prices of devices from major manufacturers such as Xiaomi and Oppo.

The release of DeepSeek's V4 model is the latest development in a long-standing effort by Chinese tech firms to reduce their reliance on foreign technology. Huawei's Ascend 950 AI chips are a key component of this effort, and the company has invested heavily in their development. Insiders know that the Chinese government has been providing significant support to domestic tech firms, including subsidies and tax breaks, to help them compete with foreign rivals. This support has helped Huawei to become a major player in the global tech industry.

In the next few weeks, investors should watch for Huawei's quarterly earnings report, which is scheduled for release on May 15. The report will provide insight into the company's production capacity and sales figures for the Ascend 950 AI chips. A surprising detail is that Huawei is reportedly working on a new chip design that will be specifically tailored to the needs of the automotive industry, a move that could potentially disrupt the global market for autonomous vehicles.