ByteDance is emerging as a key test case for China's attempt to build more of its AI stack around domestic hardware. According to Reuters sources, the Chinese parent company of TikTok is allegedly planning to train a new AI model using mainly Huawei chips.
The reported shift does not mean Nvidia is out of the picture. ByteDance is also described as the largest buyer of Nvidia's H20 AI chip adapted for China and Microsoft's biggest customer in Asia for Nvidia chips through the cloud.
What ByteDance is reportedly doing
Reuters sources say ByteDance is set to become a major customer of Huawei. The company has reportedly ordered over 100,000 Huawei Ascend 910B chips, but had received fewer than 30,000 by July.
That supply gap matters because AI model training depends on large amounts of computing power. The source article says limited availability and lower computing power compared to Nvidia chips available in China have delayed the model's development.
The new model, if it proceeds as reported, is expected to be less powerful and complex than the existing Doubao model. A ByteDance spokesperson denied plans for a new model.
The situation is therefore not a clean replacement story. It is better understood as a sign of how Chinese AI companies are trying to balance access, performance, policy pressure, and practical supply constraints.
Why Huawei chips are getting more attention
Huawei is rolling out its new Ascend 910C processor to compete with Nvidia in China's AI chip market. The company has begun sending samples to major Chinese server makers for testing, according to sources who spoke to the South China Morning Post.
The Ascend 910C builds on Huawei's previous 910B chip. Huawei plans to offer it to large Chinese internet companies that have been key Nvidia customers.
The backdrop is clear from the source article: US export restrictions limit Nvidia's ability to sell its most advanced GPUs in China. That makes domestic alternatives more strategically important, even when they face limits in availability or performance.
Analysts believe the earlier Ascend 910B chip matches or slightly exceeds the AI performance of Nvidia's A100 GPU. Huawei also claims its Ascend chips were used to train about half of China's 70 most powerful large language models last year.
Nvidia is still deeply embedded
Even as Huawei pushes forward, Nvidia's position remains strong in the facts reported. Reuters reports that ByteDance spent $2 billion on Nvidia chips last year.
Nvidia's slimmed-down H20 chip specifically for China is also selling well after a slow start, according to an SCMP source. One reason given is that Chinese AI companies are interested in Nvidia's technical support and maintenance services.
Nvidia is expected to ship more than one million H20 GPUs in China this year, generating sales of around $12 billion. Those figures show why Huawei's challenge is significant but also why the market is not shifting overnight.
For AI companies, chips are not only about raw performance. The surrounding package matters too: availability, support, maintenance, networking, storage, and the ability to keep systems running reliably at scale.
The broader China AI chip race
The Chinese government has issued a directive encouraging Chinese AI companies to prioritize the use of domestic chips. That creates a policy incentive for companies to consider Huawei and other local suppliers where possible.
Huawei appears to be developing a broader strategy to bolster China's domestic AI industry and reduce reliance on US chips. According to a source cited in the article, the company is trying to sell the chips bundled with other components like networking and storage solutions.
Huawei has also formed a group of Chinese chipmakers aiming to produce high-bandwidth memory chips for AI by 2026 as an alternative to Nvidia's offerings.
Other Chinese companies are preparing for uncertainty as well. Baidu reportedly ordered 1,600 Ascend 910B chips worth $62 million, preparing for potential future limits on Nvidia purchases.
What this means for AI development
The ByteDance report captures the central tension in China's AI hardware market. Companies want enough computing power to train competitive models, but they are operating within limits on access to Nvidia's most advanced GPUs.
Huawei's Ascend chips give Chinese AI companies a domestic path, but the reported ByteDance delay shows that supply and performance still matter. Ordering over 100,000 chips is different from receiving enough chips to move quickly.
At the same time, Nvidia's H20 continues to attract demand in China. Its technical support and maintenance services remain part of the appeal, and the source article says the chip is selling well after a slow start.
It is unclear whether Huawei can seriously challenge Nvidia's market position, especially with Nvidia's much more powerful Blackwell chips already in the starting blocks. Still, the competition is likely to drive AI development in China and reduce the country's reliance on US technology.