The Article Tells the Story of:
- Huawei AI Chips Limit Hits a Wall: The U.S. claims Huawei can only produce 200,000 advanced AI chips in 2025—far below its domestic demand. But that’s not the full story.
- China’s Fast Chase Alarms U.S. Officials: U.S. lawmakers warn China is rapidly closing the tech gap. Huawei’s AI capabilities may be closer than Washington admits.
- Nvidia Loses Ground in Chinese Markets: As Huawei rolls out its Ascend chips, Nvidia faces declining share due to tightened export bans—shifting the AI balance in Asia.
- Trade Talks Shadow Chip Control Battle: Behind new U.S.-China trade negotiations lies a deeper conflict: who controls the future of AI chips and global tech dominance?
U.S. Caps Huawei’s AI Chip Output in 2025
The U.S. Commerce Department says China’s Huawei will not produce more than 200,000 artificial intelligence chips in 2025. The announcement comes as part of ongoing efforts by the U.S. to slow China’s advances in chip technology.
Jeffrey Kessler, Under Secretary of Commerce for Industry and Security, told Congress the limit on Huawei’s chip production reflects existing export controls. He warned that the cap is below Huawei’s demand, but stressed that China is gaining ground in chipmaking.
Kessler explained that the U.S. must not become complacent. “China is investing huge amounts to expand its AI chip production,” he said. He emphasized that the U.S. must continue watching China’s AI industry closely.
Huawei Pushes Ahead Despite U.S. Restrictions
Huawei plans to ship its Ascend 910C AI chips across China to compete with U.S.-based Nvidia. The Ascend chip is Huawei’s answer to the restrictions blocking access to Nvidia’s most advanced chips.
Kessler confirmed that all 200,000 Huawei chips in 2025 will likely serve only Chinese companies. He added that even if the quantity stays low, China’s chip capabilities are improving.
The White House also weighed in. AI advisor David Sacks initially said China was only 3-6 months behind the U.S. in AI. Officials later clarified this referred to software models. The White House now says Chinese AI chips lag by 1–2 years.
Huawei CEO Ren Zhengfei admitted that his company’s chips are a generation behind U.S. competitors. But he also said Huawei invests $25 billion annually to close the gap.
Export Controls Stay Firm as U.S.-China Trade Tensions Simmer
The U.S. has restricted Huawei since 2019. These rules block Chinese firms from buying top-tier U.S. chips or equipment to build them. Washington recently reinforced these restrictions after China reduced exports of key minerals.
Despite a tentative trade deal in London this week, the U.S. remains cautious. Lawmakers, including Rep. Greg Meeks, voiced concerns that export policy might get mixed up with trade negotiations.
Kessler responded by saying export controls will remain strong. He confirmed that no new restrictions are planned but said the Commerce Department will keep watching the chip sector.
“It’s a constantly changing landscape,” Kessler said. “We must ensure our controls stay effective.”
Nvidia has lost some market share because of U.S. rules. Even though its chips are more powerful, the export limits prevent it from selling its best technology to China.
For now, Huawei’s production stays capped, but the race to control AI chips is far from over. Both sides are spending billions to win.
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