[HONG KONG] Huawei Technologies is about to export small quantities of artificial intelligence (AI) chips to the Middle East and Southeast Asia. This is an effort to establish a foothold in a market dominated by Nvidia, despite continued manufacturing challenges.
Sources familiar with the issue say that China's most powerful US chip maker is the most powerful competitor, Hardware Giant, is reaching out to potential customers in the United Arab Emirates, Saudi Arabia and Thailand. The two Gulf countries recently attacked transactions with over a million Nvidia and Advanced Micro Devices (AMD) chips over several years. Thailand's AI efforts likewise rely on Nvidia.
According to sources, Huawei offers 910b volumes in thousands of small quantities, but the exact number of certain pitches remains unknown. The company is also trying to plead customers with remote access to CloudMatrix 384, sources said. It is a China-based AI system built with a more advanced Ascend 910C chip, and according to sources familiar with the company's ideas, Huawei is currently not ready to export due to limited supply.
Huawei is focusing on selling 910°C to Chinese companies that do not have access to best-in-class American chips, sources said.
Huawei's efforts have not generated any final deals, sources say they show what Nvidia calls a formidable competitor, but they want to give foreign AI markets a flavour of its technology to boost manufacturing power.
The proposal has also attracted attention from policymakers in Washington. Washington wants to use the United States rather than China to build AI systems. US officials and Huawei themselves estimate that Ascend's lineup will raise Nvidia's offerings to more than generations.
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Parties to the UAE, including Mohamed Bin Zayed University of Artificial Intelligence, have shown no interest, sources say the situation at the meeting in Thailand is unknown. Representatives from the UAE government and the university did not respond to requests for comment, but Thai officials did not immediately respond to the public on the public holidays.
Huawei is also pursuing a contract for around 3,000 Ascend chips in Malaysia, Bloomberg News reports, but the status of that project is unknown. Meanwhile, Saudi Arabia appears to be open to potential purchases by Saudi Data & AI authorities or SDAIA. The Saudi Arabian government did not immediately respond to requests for comment, but a SDAIA spokesperson said, “At this stage we are not in a position to provide comment as the issue is out of current scope.”
A Trump administration official said Huawei can only create 200,000 AI chips this year. (That number does not include a stockpile of 2.9 million 910b.
But Washington “should not be so comfortable with the fact that China's production of these sophisticated chips is relatively small, because they know they have global ambitions,” commerce under Secretary Jeffrey Kessler told lawmakers last month.
Huawei declined to comment on the story. This is based on interviews with about half a dozen people who requested anonymity to discuss sensitive information. The company said earlier this year it had not shipped its ascend chips to Malaysia, and that the Malaysian government is also keeping its private projects apart.
US officials have focused specifically on AI infrastructure projects in the Middle East and Southeast Asia given the technical ambitions in these regions and the longstanding relationship between Beijing and Huawei.
While many governments are trying to avoid picking up sides in AI races across the US and China, Washington has put more and more pressure on these decisions by warning businesses about the use of Huawei AI processors only under certain conditions, while providing access to sophisticated American chips.
However, these conditions have not been determined yet. Almost two months after the Trump administration said it would overhaul the Biden-era framework, authorities remain divided on the national security impact of NVIDIA and AMD sales on places like the UAE and Saudi Arabia.
The Commerce Department has drafted, but has not finalized rules to formalise the May announcement and extend the licensing requirements for AI chips to Malaysia and Thailand, but does not constitute a comprehensive alternative to Biden's approach.
The agency also has not approved AI multi-billion US dollar chip cargo, which is being promoted as part of US President Donald Trump, who may travel to the Persian Gulf, according to sources familiar with the matter. AI chips have been requesting US licenses since 2023 for exports to the UAE, Saudi Arabia and other Gulf countries.
Nvidia declined to comment. AMD and the Department of Commerce did not respond to requests for comment.
For Trump officials who support these projects, Howay's attempts to export Ascendent Chips is a reason to move quickly, which is why the company has kept its customers unlocked until now.
However, some are worried that a significant export of US chips could ultimately benefit Beijing. It also argues that Nvidia's advantage is governed by Washington, which gives leverage to impose stronger security conditions on overseas data centers.
In the view of these officials, sources familiar with the issue say that Huawei only offers thousands of ascension tips to foreign customers, and even its best customers are precisely why the US can afford to spend time.
In Saudi Arabia, the state-backed AI funds say that if the US asks, it will sell them from China. The government has been working with Huawei for a long time on AI initiatives. However, it remains unclear whether Sdaia will move forward with the Ascend 910b deal, or how the US will respond.
Earlier this year, the Commerce Department said Huawei's use of Huawei's Ascend chip “anywhere in the world” could violate US trade restrictions.
Amid a backlash from Beijing, the Commerce Department has removed its global references, but the guidance still states that unauthorized use of future Huawei models, the Ascend 910B, 910C, or 910D, could result in penalties from Washington. Bloomberg
