Huawei seeks AI chip deals in Middle East, Southeast Asia, Bloomberg News reports

Huawei Technologies is attempting to export its older-generation Ascend 910B AI chips to the Middle East and Southeast Asia, aiming to establish a foothold in markets currently dominated by Nvidia. While no deals have been finalized and initial interest is mixed, this initiative highlights Huawei's strategy to expand internationally amidst U.S. export controls that have largely excluded American chipmakers like Nvidia from the lucrative Chinese data center market. The move underscores the intensifying global competition and geopolitical dynamics shaping the AI chip sector.

Analysis

Huawei is strategically attempting to penetrate the AI chip market in the Middle East and Southeast Asia by exporting its older-generation Ascend 910B chips. This move represents a direct challenge in regions currently dominated by Nvidia, although the effort is nascent, with no deals finalized and reported disinterest from key markets like the UAE. The initiative highlights a key consequence of U.S. export controls; as confirmed by an Nvidia spokesperson, these policies have effectively locked U.S. firms out of the Chinese data center market, creating a protected domestic space for Huawei to thrive. Consequently, Huawei is now leveraging its position to test international expansion with older hardware, while reserving its more advanced 910C chips for the domestic Chinese market and offering remote cloud access to advanced systems to circumvent supply limitations. This dual strategy underscores the intensifying geopolitical competition in the semiconductor industry, where U.S. trade policy is inadvertently fostering a state-backed competitor that is beginning to seek market share beyond its borders.

Key Decisions for Investors

• Investors in Nvidia (NVDA) should monitor for any finalized deals by Huawei in these emerging markets, as this would be a leading indicator of a new, tangible competitive threat to Nvidia's global dominance.
• The situation underscores that while U.S. export controls protect national security interests, they also cede the significant Chinese market to local players and incentivize them to compete internationally, representing a long-term strategic risk to Nvidia's market share.
• Given that Huawei is initially offering older-generation chips and facing a tepid response, the immediate threat to Nvidia's revenue is low, but this development warrants close observation as a potential early sign of eroding market concentration and pricing power in the AI hardware sector.