DeepSeek plans big Huawei AI chip order to power new data centre

DeepSeek plans to deploy at least 160,000 of Huawei Technologies Co.’s top accelerators at a massive data centre it’s building in Inner Mongolia, which could create one of the largest known clusters of Huawei AI chips and advance China’s efforts to replace Nvidia Corp.

The AI pioneer intends to use Huawei’s next-generation Ascend 950DT chips for operating its models, though the timeline for installation will depend on Huawei’s production capabilities, according to people familiar with the matter.

The startup doesn’t currently plan to use the 950DT chips for training, one of the people said, even though Huawei designed and marketed these processors to serve that more demanding function. While DeepSeek tried to train its previous models on Huawei chips, it has so far relied on Nvidia accelerators for this crucial step.


DeepSeek wants to purchase more of Huawei’s best chips, according to the people, but China’s semiconductor champion doesn’t currently have the production capacity. Shortages of components such as top-end memory will cap Huawei’s output of the 950DT at the low hundreds-of-thousands this year, one of the people said.

Huawei is balancing demand from other clients and trying to export small volumes overseas, so fulfilling DeepSeek’s order could take more than a year, the people said, speaking on condition of anonymity to discuss a confidential deal.

If completed as envisioned, the Inner Mongolia hub will be key to driving AI development at DeepSeek, which is in talks to raise billions of dollars to build out its infrastructure. The installation would dwarf other publicly known clusters of Huawei’s Ascend processors, a meaningful step as China tries to wean itself off Nvidia components. By the time it comes online, according to one person with knowledge of Huawei’s production capabilities, China could have several clusters of that size.

DeepSeek did not respond to requests for comment and a Huawei spokesperson had no immediate comment.

More than one hundred thousand chips in a single facility would put DeepSeek’s ambitions in the ballpark of the data centres Western companies now routinely build — albeit China’s would be filled with less capable processors. Nvidia’s accelerators are the global standard for training and running AI models, but are largely prohibited from sale to China without US permission.

Huawei is one of a handful of firms central to Beijing’s goal of dominating AI despite US restrictions. The Shenzhen-based telecom titan has emerged as the Asian country’s de facto national chipmaking champion, while Hangzhou-headquartered DeepSeek has set the template for disruptive AI model releases that’s since been followed by the likes of Moonshot.

China’s ability to produce — and eventually, export — its own AI chips is one of the defining factors of its technological competition with the US. It’s a metric closely watched by American policymakers, who have levied years of restrictions on companies including Huawei in order to stall that progress.

Those curbs have constrained Huawei’s production and performance. Bloomberg News reported last year that Huawei plans to make around 1.6 million Ascend dies in 2026: enough base components for around 600,000 of the company’s marquee 910C chips plus a smattering of other models. Unveiled around a year ago, the 950DT is an upgraded and more capable version that’s widely regarded as comparable in power to Nvidia’s previous Hopper generation of chips.

Still, even the possibility of a 160,000-chip cluster shows progress. Just six months ago, an official newspaper of tech hub Shenzhen said that it began operations of the country’s first ever 10,000-chip intelligent computing cluster using Huawei’s Ascend series — a tiny facility compared to data centres in the US. Elon Musk’s SpaceXAI brought a cluster 10 times that size online in 2024.

In June, Chinese food delivery giant Meituan said it trained an AI model using 50,000 domestic chips, without providing further details. Z.AI Co. in July completed construction of a 1-gigawatt data centre it plans to fill with only Chinese-made chips, though its current installed base is low, in the ballpark of 10,000 cards.

San Jose, California-based Nvidia has complained that this transition to homemade silicon in China is the natural consequence of years of US export controls, which Washington first imposed in 2022 over concerns that American AI chips could boost China’s military.

Beijing is indeed urging China’s AI labs to switch to domestic hardware, an effort that some are embracing more fervently than others.

China’s private sector still prefers Nvidia chips, though, as evidenced by large orders from the likes of Alibaba Group Holding Ltd. and Tencent Holdings Ltd. after US President Donald Trump eased Washington’s restrictions. And Chinese companies can still access massive quantities of even Nvidia’s best chips by renting computing power located overseas, which doesn’t generally violate the US rules. Washington has also accused the likes of Moonshot and DeepSeek of using smuggled Nvidia hardware to fuel their AI development.

But China’s central government is holding fairly firm: while Trump’s team was prepared to allow the sale of as many as a million Nvidia H200 chips, which are the top model from a previous Nvidia generation, Beijing has so far green-lit a fraction of that total for import.

DeepSeek is one of several Chinese companies that have optimized their models to run on domestic accelerators. The firm has asked for Beijing’s help in convincing Huawei to allocate more chips to the startup — and faster, one of the people said.

China’s Ministry of Industry and Information Technology, which oversees national tech policy, did not respond to a faxed request for comment.

DeepSeek’s AI infrastructure goals in Inner Mongolia are at a gigawatt scale, which at full utilization would consume enough energy to power roughly 750,000 homes. The 160,000 Ascend 950DT chips DeepSeek plans to install there would comprise only one chunk of that capacity.

It’s unclear what types of chips the AI lab plans to use for the remainder. Trump administration officials have alleged that the startup has procured Nvidia’s top Blackwell chips and installed them in Inner Mongolia, a claim Bloomberg hasn’t independently verified.