Tech war: US curbs on global use of Huawei chips add uncertainty to China’s AI investment

New guidance on US export rules could deter Chinese firms with global ambitions from using Huawei processors, analysts say

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The US has clarified its export rules to bar the use Huawei’s AI chips anywhere in the world. Photo: EPA-EFE

Published: 4:02pm, 16 May 2025Updated: 4:46pm, 16 May 2025

New US guidelines on the use of Huawei Technologies’ Ascend chips have introduced fresh uncertainty into China’s investment spree in artificial intelligence (AI) infrastructure, according to analysts and industry insiders.

Under new guidance issued by the US Commerce Department earlier this week, the use of Ascend chips “anywhere in the world” could be interpreted as a violation of American export controls.

This puts Chinese companies investing heavily in computing infrastructure in a difficult position. On one hand, they have been denied access to cutting-edge AI processors from US chipmaker Nvidia. On the other hand, they risk penalties from the US, ranging from fines to imprisonment, for using domestic alternatives such as Huawei’s 910B, 910C and 910D Ascend chips.

The US move was an “extraterritorial regulatory measure”, said Ray Wang, a Washington-based analyst focused on the US-China tech war. He noted that the ruling could deter Chinese firms with global ambitions from using Huawei processors because they fear violating US regulations.

A Huawei inference server seen at a tech fair in Hong Kong. Photo: Reuters

Chinese AI companies may encounter compliance risks if they continue using Ascend chips, according to a research note released by Shanghai-based consultancy ICWise on Friday.