ByteDance Set to Acquire Huawei’s Shengteng Chips with Major Order Valued at 40 Billion Yuan
Summary:
- ByteDance has announced plans to purchase Huawei’s Shengteng chips, with an initial order exceeding 40 billion yuan.
- The acquisition follows Nvidia’s supply disruptions, escalating the need for enhanced domestic computing power.
- This strategic move is poised to significantly accelerate the growth and adoption of AI chips in China.
In a significant development for the technology sector, ByteDance is set to place substantial orders for Huawei’s Shengteng chips, reflecting a strategic pivot towards bolstering domestic computing capabilities. Reports indicate that overall procurement in 2026 may exceed 40 billion yuan, a stark contrast to the negligible amounts procured in 2025.
ByteDance’s initial order, featuring a substantial batch of chips, is expected to deliver soon and represents a critical moment in advancing China’s computing prowess. This surge in demand for domestic chips stems from two prevailing factors. Firstly, Nvidia’s decision to cut off supplies in April 2025 created a noticeable gap in the market. Secondly, the explosive growth in computing needs for ByteDance’s cloud services, particularly through its Volcano Engine and AI applications like Doubao, necessitated this increased procurement.
To facilitate this transition, ByteDance has initiated a partnership with Huawei, underscoring the urgency to adapt to the evolving landscape of AI technology. Despite this collaboration, ByteDance has yet to publicly comment on the specifics of the agreement.
Industry insights reveal that while the performance of individual Shengteng chips may trail behind Nvidia’s offerings, the combination of multiple cards can mitigate this gap, providing competitive computational power. This underlines a critical pivot in strategy; as electricity constraints shape the development of AI chips in the US, China is positioning itself to explore possibilities beyond these limitations.
This initiative not only reflects ByteDance’s commitment to scaling its AI capabilities but also highlights the broader implications for the domestic tech ecosystem. The increasing reliance on Huawei’s chips could lead to accelerated innovation and wider availability of advanced AI technologies within China.
As domestic players like ByteDance continue to engage in deep collaboration with local manufacturers, the potential for the popularization of AI chips enhances, contributing to a robust technological landscape. The partnership aims to streamline development processes and amplify overall efficiency within the industry.
In closing, the shift towards Huawei’s Shengteng chips marks a pivotal evolution for ByteDance and the broader tech landscape in China. This strategic decision not only aims to fill the void left by Nvidia but also embodies a forward-thinking approach to domestic technology development, potentially laying the groundwork for rapid advancements in artificial intelligence applications.
As further details unfold, this move is poised to enhance competitive dynamics within the sector, reinforcing the significance of domestic manufacturing capabilities in the face of global supply chain challenges.
