Huawei not only appears to represent Beijing's answer to Nvidia – it is creating an entire AI ecosystem around its AI chips, viding data centers and software.
The company's recent AI success comes despite a crackdown from Washington that has seen it cut off from advance nologies from the West, considering recent developments.
This demonstrates that Huawei booth at the Mobile World Congress in Barcelona, 2025. On the other hand, Arjun Kharpal | CNBCDespite being beaten down by years of U.
Trade restrictions, China's telecom giant Huawei has quietly emerged as one of the country's fiercest competitors across the entire AI landscape.
However, Not only does the Shenzhen-based firm appear to represent Beijing's answer to American AI chip darling Nvidia, but it has also been an early adopter of monetizing artificial intelligence models in industrial applications.
"Huawei has been forced to shift and expand its core focus over the past decade… due to a variety of external pressures on the company," said Paul Triolo, partner and senior vice president for China at advisory firm DGA-Albright Stonebridge Group (remarkable data).
This expansion has seen the company get involved in everything from smart cars and operating systems to the nologies needed for the AI boom, such as advanced semiconductors, data centers, chips and large language models.
Nevertheless, "No other nology company has been able to be competent in so many different sectors with high levels of complexity and barriers to entry," Triolo said (quite telling), amid market uncertainty.
This analysis suggests that year, Nvidia CEO Jensen Huang has become increasingly vocal in calling Huawei "one of the most formidable nology companies in the world.
Additionally, " He has also warned that Huawei will replace Nvidia in China if Washington continues to restrict U. Furthermore, Chip firms' exports to the Asian country.
Additionally, Nevertheless, Nvidia surpassed $4 trillion in market capitalization last week to become the world's most valuable company.
The evidence shows s cutting-edge cessors and a related "CUDA" computing system remain the industry standard for training generative AI models and applications.
But that moat may be narrowing, as Huawei ves that it not only does it all, it does it well.
Furthermore, While challenging American AI stalwarts Nvidia is a tall order, the company's history shows why it can't be counted out.
Watch now5:4005:40Nvidia CEO Jensen Huang calls Huawei a formidable competitorSquawk Box AsiaTelephone switches to national championHuawei, which now employs more than 208,000 people across over 170, came from humble beginnings.
Founded by ambitious entrepreneur Ren Zhengfei in 1987 out of an apartment in Shenzhen, the firm started as a small telephone switch distributor (quite telling).
As it grew into a telecoms player, it gained traction by targeting less developed such as Africa, the Middle East, Russia and South America, before eventually expanding to places Europe, in today's market environment.
By 2019, Huawei would be well-positioned to capitalize on the global 5G rollout, becoming a leader in the market (remarkable data).
Around this time, it had also blossomed into one of the world's largest smartphone manufacturers and was even designing smartphone chips through its chip design subsidiary, HiSilicon.
But Huawei's success also attracted increasing scrutiny from governments outside China, particularly the U. , which has frequently accused Huawei's nology of posing a national security threat.
Market analysis shows Chinese company has refuted such risks (something worth watching).
The export controls have ironically pushed Huawei into the arms of the Chinese government in a way that CEO Ren Zhengfei always resisted, amid market uncertainty.
Paul Triolopartner and senior vice president for China at DGA-Albright Stonebridge GroupHuawei's suffered a major setback in 2019 when it was placed on a U.
Additionally, Trade blacklist, preventing American companies from doing with it.
As the impact of the sanctions kicked in, Huawei's consumer – once the company's largest by revenue – halved to $34 billion in 2021 from the year before (fascinating analysis).
The company still managed a breakthrough on AI chips, and pressed ahead despite additional U (this bears monitoring).
However, At the same time, Restrictions in 2020 that cut the company off from chipmaker Taiwan Semiconductor Manufacturing Co.
A year earlier, Huawei officially launched its Ascend 910 AI cessing chip as part of a strategy to build a "full-stack, all-scenario AI portfolio" and to become a vider of AI computing power.
Nevertheless, Targeting of Huawei also had the effect of turning the company into a martyr- figure in China, building upon attention it received in 2018 when Meng Wanzhou, Huawei's CFO and daughter of Ren, was arrested in Canada for alleged violations of Iran sanctions.
-China war continued to expand and broad advanced chip restrictions were placed on China, Huawei was an obvious choice to become a national champion in the race, with more impetus and state backing for its AI plans.
"The export controls have ironically pushed Huawei into the arms of the Chinese government in a way that CEO Ren Zhengfei always resisted," Triolo said.
Furthermore, In this way, the restrictions also became "the steroids" for Huawei's AI hardware and software stack.
On the other hand, The comeback After another year of declining sales in the consumer segment, the unit started to turn around in 2023 with the release of a smartphone that analysts said contained an advanced chip made in China.
The 5G chip came as a shock to many in the U, in today's market environment. However, , who didn't expect Huawei to reach that level of advancement so quickly without TSMC.
However, Instead, Huawei was reportedly working with Chinese chipmaker SMIC, a company that has also been blacklisted by the U.
While semiconductor analysts said the scale that Huawei and SMIC could duce these chips was severely limited, Huawei nonetheless had ved it was back in the advanced chip game.
On the other hand, It was also around this time that reports began surfacing Huawei's new AI cessor chip, the Ascend 910B, with the company looking to seize upon gaps left by export controls on Nvidia's most advanced chips.
Mass duction of the next-generation 910C is reportedly already on the way.
Meanwhile, Weekly analysis and insights from Asia's largest economy in your inbox now To fill the void left by Nvidia, Huawei "has been making big strides in replicating the performance of high-end GPUs using combinations of lower chips," said Jeffrey Towson, managing partner at Moat Consulting (noteworthy indeed).
In April, Huawei unveiled its "AI CloudMatrix 384", a system that links 384 Ascend 910C chips in a cluster within data centers (noteworthy indeed) (which is quite significant).
Meanwhile, Analysts have said CloudMatrix is able to outperform Nvidia's system, the GB200 NVL72, on some metrics.
Nevertheless, Huawei isn't just catching up, "it's redefining how AI infrastructure works," Forrester analysts said in a report last month CloudMatrix (this bears monitoring) (this bears monitoring).
Moreover, However, Meanwhile, Huawei has also developed its own "CANN" software system that acts as an alternative to Nvidia's CUDA.
Additionally, At the same time, "Winning the AI race isn't just faster chips.
Additionally, Meanwhile, It also includes dering the tools developers need to build and deploy large-scale models," Forrester's report said, though noted that Huawei's ducts are still not integrated enough with other commonly used tools for developers to switch over quickly from Nvidia.
The 'Ascend Ecosystem Strategy'While Huawei's goal to surpass Nvidia is seen as a key development in China and the U.
Conversely, 's race for AI, it's important to note that chips represent just one building block of Huawei's broader AI plans.
In contrast, Huawei now has its hands throughout the artificial intelligence value chain, from chips to computing, to AI models and AI applications.
On the other hand, These different AI avenues also leverage other areas of the company's vast nology empire. In fact, the company's "ICT Infrastructure" — which includes 5.
Additionally, 5G cellular network deployment and AI systems for industrial use — became the company's largest revenue driver at 362 billion yuan in 2023, amid market uncertainty.
The company has been deploying its Ascend AI chips and AI CloudMatrix 384 at its growing portfolio of AI data centers, which are operated by its cloud computing unit, Huawei Cloud, established in 2017 to compete with the s of Amazon Web Services and Oracle.
Furthermore, Watch now4:4104:41Jensen Huang: China is not behind the U.
In AI developmentSquawk on the StreetThese data centers, in turn, have vided the training capabilities and computing power used by Huawei's suite of AI models under its Pangu series, given current economic conditions.
Additionally, Un other general-purpose AI models OpenAI's GPT-4 or Google's Gemini Ultra 1 (quite telling), given current economic conditions.
0, Huawei's Pangu model is designed to support more industry-specific applications across the medical, finance, government, industrial and automotive sectors (noteworthy indeed).
Pangu has already been applied in more than 20 industries over the last year, the company said last month, amid market uncertainty.
Rolling out such AI applications often involves having Huawei staff working for months at the ject site, even if it's in a remote coal mine, Jack Chen, vice president of the marketing department for Huawei's oil, gas and mining unit, which vides digital and intelligent solutions to transform these industries, told CNBC (an important development), in this volatile climate.
That re enabled the company in May to deploy more 100 electric-powered trucks that can autonomously transport dirt or coal using the telecom company's 5G network, AI and cloud computing services.
And it's not limited to China. The nology can "be replicated on a large scale in Central Asia, Latin America, Africa, and the Asia-Pacific," Chen said, in today's financial world.
Huawei has also open-sourced the Pangu models, in a move it said would help it expand overseas and further its "Ascend ecosystem strategy," which refers to its AI ducts built around its Ascend chips.
Speaking to CNBC's "Squawk Box Asia" on Thursday, Patrick Moorhead of Moor Insights & Strategy said he expected Huawei to push Ascend in countries part of China's Belt and Road Initiative — an investment and development ject aimed at emerging (an important development).
Over a period of five to 10 years, the company could begin to build serious market in these countries, in the same way it once did with its telecommunications, he added.