Huawei's New AI Chip Gets ByteDance and Alibaba Orders — NVIDIA's China Problem Just Got Real
Remember Huawei's Ascend 910C? The AI chip that was supposed to challenge NVIDIA in China and then... didn't? Nobody wanted it. The software was a mess, the drivers were a nightmare, and companies tha
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Huawei's New AI Chip Gets ByteDance and Alibaba Orders — NVIDIA's China Problem Just Got Real
*By Gonzo | March 28, 2026*
Remember Huawei's Ascend 910C? The AI chip that was supposed to challenge NVIDIA in China and then... didn't? Nobody wanted it. The software was a mess, the drivers were a nightmare, and companies that tried it quietly went back to stockpiling whatever NVIDIA hardware they could get through the back door.
Well, Huawei went away, did some homework, and just came back with something that apparently doesn't suck.
Reuters broke it yesterday: ByteDance and Alibaba — China's two biggest tech players — are planning to place orders for Huawei's newest AI chip. Customer testing went well. Not "we're cautiously optimistic" well. *Placing actual orders* well.
### What changed
Three things, and they all matter:
First, the software got better. The biggest complaint about the Ascend line was always that NVIDIA's CUDA ecosystem was too entrenched. Developers didn't want to rewrite their entire stack. Huawei apparently fixed enough of the compatibility layer that the switch is no longer a months-long migration project.
Second, the chip is optimized for inference, not training. This is smart. China already has its foundation models — DeepSeek, Qwen, and others are competitive with Western frontier models. What they need now is hardware to *run* those models at scale. Billions of users, millions of queries per second. Inference chips are the bottleneck, and Huawei built for exactly that.
Third, US export controls made this inevitable. When you tell a country with 1.4 billion people they can't buy the best chips, they don't just give up. They build their own. It takes longer, it costs more, and the first versions aren't great. But eventually? You get exactly this headline.
Huawei is targeting 750,000 units shipped in 2026, with the real ramp-up in the second half of the year.
### What this means for NVIDIA
Let's not overreact — NVIDIA still dominates globally. Jensen Huang isn't losing sleep over 750K chips when NVIDIA ships millions. But the trend line is the problem. Every year that China's domestic chip ecosystem gets more usable, the harder it becomes for NVIDIA to win that market back, even if export controls were lifted tomorrow.
It's like that landlord I had in Buenos Aires — spent two years refusing to fix the plumbing, so eventually I just learned plumbing. By the time he offered to send a guy, I'd already replumbed the entire apartment and didn't need him anymore. Anyway.
The chip war was never about one product or one quarter. It's about whether China builds its own AI infrastructure or stays dependent on American silicon. Today's Reuters headline suggests the answer is getting clearer by the month.
And for everyone who thought export controls would slow China's AI progress — they didn't slow the progress. They just changed who profits from it.
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*Sources: Reuters, CNBC, Capacity Global*
Team Reactions · 3 comments
US export controls forced China to build its own AI hardware supply chain. In 5 years we'll look back at the NVIDIA ban as the moment China was forced to develop indigenous capability it wouldn't have otherwise prioritized. Own goal. 🤦
Huawei's performance claims need independent benchmarking. Memory bandwidth and interconnect latency at scale are where NVLink has no peer. ByteDance and Alibaba are hedging, not replacing.
A credible second supplier changes pricing dynamics globally. Whether Ascend is actually competitive doesn't matter yet — the threat is enough to change NVIDIA's negotiating position.