Huawei Moves into Egypt's AI Project, Plans to Export 2,000 Ascend Chips; U.S. Rushes to Form Alliance to Block It

Huawei has actively pitched to the Egyptian government to establish an artificial intelligence (AI) data center for military, surveillance, and other public sector applications, a move that underscores its ambitions in the global chip market and has triggered high alert in Washington, prompting U.S. officials to urgently formulate countermeasures.

According to sources and documents obtained by Bloomberg News, Huawei, China’s leading challenger to NVIDIA (NVDA-US), has submitted a proposal in response to a tender by the Cairo government. The plan involves exporting 1,408 top-tier Ascend 950 series chips to build an AI training cloud, and supplying 600 additional chips—either the same model or the earlier 910B—for two inference clusters to run trained AI models. Documents indicate that Huawei aims to complete the infrastructure within 12 months.

If successful, this project would mark an initial but substantial step for China in challenging U.S. dominance over global AI infrastructure. Huawei would become a key AI supplier to Africa’s second-largest economy and gain a foothold in the Middle East.

The U.S. has been actively investing in more lucrative AI data center markets in the United Arab Emirates and Saudi Arabia. This could also be the first confirmed overseas export of Huawei’s Ascend accelerators after over a year of attempts.

Huawei declined to comment, while Egypt’s Foreign Ministry did not respond to inquiries.

Sources revealed that upon learning of the proposal, the Trump administration’s team immediately prompted the State Department to contact companies including NVIDIA, AMD (AMD-US), and Microsoft (MSFT-US) to discuss forming a U.S. corporate alliance to counter Huawei’s AI chip bid.

The Trump administration has previously warned countries worldwide that using certain Huawei accelerators without Washington’s approval could lead to legal sanctions, though it remains unclear whether U.S. officials have invoked this guidance in talks with Egypt.

Egypt has now become the latest battleground between the two global tech powers, highlighting the geopolitical dilemma faced by 'Global South' nations seeking AI development opportunities.

Notably, this could be the first time the U.S. and China are directly competing for the same government-led AI data center tender. The outcome will test not only Huawei’s chip capabilities but also the Trump administration’s nascent semiconductor diplomacy in emerging markets, and Egypt’s ability to navigate between two diverging tech ecosystems while maintaining control over its own AI development.

A State Department spokesperson said: 'Egypt is one of dozens of countries with which we are engaging on U.S. leadership in AI technology.' The spokesperson added that American AI can benefit the world and that the U.S. is ready to collaborate with nations to advance AI development and deployment in ways that respect sovereignty and enhance capabilities.

Sources indicated that Huawei’s strategy in Africa and globally closely aligns with Beijing’s diplomatic relations with individual countries. Huawei is broadly pursuing government clients across Africa, including in education and healthcare, in nations such as Egypt and Kenya. Kenya hosts a struggling U.S.-operated data center, once seen as a flagship project of the Biden administration’s AI diplomacy in Africa.

Huawei’s Egypt proposal also includes collaboration with iFlytek, a major Chinese surveillance technology firm. Both iFlytek and Huawei have been blacklisted by the U.S. since 2019.

The systems offered by these firms include vehicle and facial recognition based on national population databases, as well as broader 'situational awareness' systems, packaged as a 'panoramic view that sees through the entire city at a glance.' In a 102-page presentation, one slide listing 'basic image applications' features the logo of China’s Ministry of Public Security.

For Huawei, a successful deal would validate both market demand and supply capacity. Due to U.S. restrictions on purchasing key production equipment, Huawei has long struggled to mass-produce AI chips, but is now gradually increasing output.

It remains unclear what applications the U.S. bid will emphasize, or whether the U.S. government will impose usage restrictions. Since 2023, exports of AI chips to Egypt require Washington’s approval, allowing the Trump administration to attach conditions through the licensing process.