Can China’s Ascend Chips Find a Market Beyond Washington’s Reach?

A month ago, I sat down at my computer and outlined the plans for a research tool I wanted to build to improve the speed, efficiecncy, and breath of my own work. The backbone would be built on an LLM, and it incorporate AI to bridge at least seven different programs. I am not a programmer, but the complex ecsystem of microchips and semiconductors has created the world’s biggest crutch for average people, like me, to build lean on to development complex things. For all of the bad and the good people forcast as a result of AI’s rise and the increasingly complexity of supply chains to physically build its infrastructure, I am finally beginning to understand why nations are scrambling for a piece, down to the last iota of critical minerals buried deep in central Africa. This remains the root of many aspects of U.S.-China competition.

In addition to my thoughts below, I added the translation of an interview by Huawei’s CEO I found fascinating from a little bit back.

The United States has made a concerted effort to curb China’s access to key U.S. technologies, particularly semiconductors. Now, Beijing is pushing back. Huawei’s announcement that its Ascend AI chips are ready for global sale marks China’s latest move to project technological confidence and self-sufficiency

Washington has long sought to slow Beijing’s ambitions in advanced computing and artificial intelligence. Through a steady tightening of export controls—from Huawei’s placement on the Entity List in 2019 to sweeping restrictions on advanced chips and semiconductor manufacturing equipment in 2022, multiple U.S. administrations have sought to restrict China’s access to U.S. technology and blunt Huawei’s growing international popularity in the developing world.

The pressure campaign escalated further in May 2025, when the Bureau of Industry and Security (BIS) issued new guidance under General Prohibition 10 (GP10) of the Export Administration Regulations. It relaxed restrictions on the sale of Nvidia chips, but warned that any use of Huawei’s Ascend AI chips (models 910B, 910C, 910D)—anywhere in the world—would likely violate U.S. export controls, on grounds that these chips were developed and manufactured using U.S.-origin technology without the required licenses (the Cisco lawsuit of 2003). Foreign entities, including firms in the Middle East, could face stiff penalties, including fines, loss of export privileges, or being placed on BIS’s Denied Persons List, if they were caught integrating or deploying Huawei;s Ascend chips.

At the same time, the U.S. government signaled it was preparing additional sanctions against Chinese semiconductor firms, with potential Entity List designations for ChangXin Memory Technologies (CXMT), SMIC subsidiaries, and Yangtze Memory Technologies Co. (YMTC).

This week, several outlets reported that the Trump administration’s decision to relax restrictions on Nvidia’s H20 chips to China earlier in April—while simultaneously banning Huawei’s Ascend chips in May—was part of a broader negotiation tied to restoring U.S. access to China’s rare earth trade. The shift followed Beijing’s use of its monopoly over critical mineral mining and processing to restrict U.S. access to the raw materials essential for manufacturing microchips and semiconductors.

This intensifying contest directly affects China’s ambitions, especially in regions like the Middle East where it hopes to secure some sales. While many GCC countries have cultivated strong commercial ties with Beijing, the United States is increasingly enforcing sharp lines around technology ecosystems. For Gulf governments, recent U.S. moves have had a clear upside. After years of lobbying, The Saudi and Emirati governments secured expanded access to premium U.S. chips, particularly Nvidia GPUs. This significantly reduces any incentive they may have to risk those deals to pivot toward Huawei’s Ascend platform, even if it is cheaper and increasingly capable.

Furthermore, Huawei’s Ascend chips, while getting better, are not superior to their Nvidia competition. Huawei’s CEO admitted in an interview that their chips lag at least one year behind Nvidia. Analysts suggest that while Huawei’s Ascend 910B chip can come close to matching Nvidia’s older A100 chip for some AI tasks, it still falls short of Nvidia’s newest H100 chip, which is faster and more efficient overall. China’s domestic semiconductor industry also faces persistent production challenges, with Huawei dependent on less-advanced fabrication processes than those accessible to Nvidia through TSMC.

Opportunity in the Global South

Huawei’s global push for Ascend chips may open opportunities in emerging markets—particularly in countries priced out of Nvidia’s ecosystem or politically distanced from U.S. influence. But its path into premium markets like the GCC will be more difficult. Washington’s policy of offering Nvidia access while punishing Huawei adoption aims to keep allies and partners, especially in the Middle East, stay locked into the U.S.-led technology ecosystem.

If Huawei’s new buyers end up being global south countries, that is a narrower playing field than Beijing might hope, but it could help advance China’s image among global south countries. Emerging economies across Africa, Southeast Asia, and parts of Latin America may welcome a lower-cost alternative to Nvidia as they seek to develop indigenous AI ecosystems and lessen dependency on Western tech stacks. They may see this as a pathway for developing nations to achieve digital independence on their own terms.

The lesson for the U.S. is that Huawei’s Ascend chips are good, getting better, but still not as good as Nvidia’s best products. The threat of U.S. sanctions makes adoption by key swing markets costly and gives the U.S. a big advantage with the big buyers, especially the UAE, whose AI investments put it on track to be the industry leader in the Middle East and a critical node on the global supply chain. For Huawei, the best near-term prospects lie elsewhere: among countries that can’t afford Nvidia or are willing to brave the diplomatic backlash that comes with embracing China’s tech ecosystem.

---

The more open the country is, the more progress we will make.

——Dialogue with Ren Zhengfei

People's Daily (June 10, 2025 Version 01)

　　Recently, at Huawei's headquarters in Shenzhen, a group of People's Daily reporters had a face-to-face exchange with Huawei CEO Ren Zhengfei on some hot topics of public concern.

　　From this, we truly feel the confidence of an entrepreneur to "unswervingly do his own thing well."

　　“Don’t think about the difficulties, just do it, move forward step by step”

　　Question: Facing external blockades and suppression, and encountering many difficulties, what do you think?

　　A: I haven’t thought about it. It’s useless to think about it. Don’t think about the difficulties. Just do it and move forward step by step.

　　Q: Ascend chips have been “warned” of risks in use. Does this have any impact on Huawei?

　　A: There are many chip companies in China, and many of them are doing well. Huawei is one of them. The United States has exaggerated Huawei's achievements. Huawei is not that great yet. We need to work hard to live up to their evaluation. Our single chip is still one generation behind the United States. We use mathematics to make up for physics, non-Moore's to make up for Moore's Law, and group computing to make up for single chips. The results can also achieve practical conditions.

　　Q: If there are difficulties, what are the main ones?

　　A: Difficulties are difficult. When was there no difficulty? Wasn't it difficult when people were slashing and burning? Wasn't it difficult in the Stone Age? When humans were using stone tools, how could they have imagined high-speed rail? China has opportunities in low- and mid-end chips. Dozens or hundreds of chip companies in China are working hard. Compound semiconductors in particular have greater opportunities. For silicon-based chips, we use mathematics to supplement physics, non-Moore's complement to Moore's Law, and use the principles of cluster computing to meet our current needs. Software cannot hold us back. It is mathematical graphic symbols, codes, and some cutting-edge operators and algorithms that are built up without any obstacles. The difficulty lies in our education and training, and the construction of a talent team. China will have hundreds or thousands of operating systems in the future to support the progress of China's industry, agriculture, and medical care.

　　Q: There are a lot of voices praising Huawei now, and the level of recognition of Huawei is very high.

　　A: We are also under a lot of pressure when people praise us. We will be more sober when people criticize us. We make products, and people will criticize us when they use them. This is normal. We allow people to criticize us. As long as they tell the truth, we support them even if they are criticisms. Don't care about praise or criticism, but care about whether you can do well. If you do well, there will be no problem.

　　Q: From your attitude towards difficulties and criticism, I feel that you have a strong heart. You don't care about praise or criticism, but are determined to do your own thing. This should be an important reason why Huawei has come this far.

　　A: There are still too many people who say we are good. We should understand those who do theoretical research. Their works are too high-brow and not understood by ordinary people. Moreover, it will take decades or even hundreds of years for their contributions to be seen. Unwarranted accusations against them are not conducive to the long-term development of the country. We should understand and support those who do theoretical work. We should understand their broad minds. Their great obscurity is the hope of our country. Don't praise one and suppress another. Those who do theoretical research are the hope of the country's future.

　　"Theoretical scientists are lonely. We need to have strategic patience and understand them."

　　Question: What do you think of basic theoretical research?

　　A: When my country has a certain economic strength, it should attach importance to the research of theories, especially basic theories. Basic research takes more than 5-10 years, usually 10, 20 years or even longer. If we do not do basic research, we will have no roots. Even if the leaves are lush and flourishing, they will fall down when the wind blows. It is very expensive to buy foreign products because the price includes their investment in basic research. Therefore, whether China does basic research or not, it has to pay for it. Can it pay for its own basic research?

　　Question: People may find it difficult to understand basic research at first and may ask what the purpose of this research is and what benefits it can produce.

　　Answer: Few people in the world understand scientific breakthroughs, so those who don't understand should not comment on them. Einstein discovered that light bends, which was confirmed a hundred years later. In the 1940s, there was an agronomist in Guizhou named Luo Dengyi. When he was analyzing and studying the nutritional components of fruits and vegetables, he discovered a wild fruit called sea buckthorn with a high vitamin content. China was still in the Anti-Japanese War at that time, and the level of social education was still very low, so few people understood it. Later, he wrote a paper saying that sea buckthorn is the king of vitamin C. After nearly a hundred years, Guizhou made it into a natural sea buckthorn drink rich in vitamins, a luxury among vitamin drinks, costing nearly 100 yuan a bottle, and it was sought after. The sea buckthorn industry became a channel for farmers to get rid of poverty and become rich. People really got to know Luo Dengyi, who was sitting at a broken table during the Anti-Japanese War.

　　Q: Many research results may seem insignificant at first, but they are often very useful in the end.

　　A: Theoretical scientists are lonely. We need to have strategic patience and understand them. Tu Youyou's research on artemisinin was the same. Huang Danian, who "explored innovation and served the country with sincerity", was the same. There are only a few people in the world who can communicate with the symbols, formulas, and thinking in their minds. We should respect theoretical scientists because we don't understand their culture. Society should be tolerant and the country should support them.

　　Q: The basic research cycle will be very long, but companies need to focus on efficiency.

　　A: We invest 180 billion yuan in R&D each year, of which about 60 billion yuan is for basic theoretical research, which is not subject to assessment. About 120 billion yuan is invested in product R&D, and the investment is subject to assessment. Without theory, there will be no breakthroughs, and we will not be able to catch up with the United States.

　　Question: This is a kind of long-termism. I heard that Huawei has a "Huang Danian Tea House".

　　A: Huang Danian is a great scientist. my country discovered him during the Gulf War. The US military had a pod under its helicopter to detect weapons buried by Saddam in the desert. It destroyed them accurately as soon as the war started. After further investigation, we found out that the pod was made by the Chinese. Huang Danian made a prospecting pod at a British university, which was used by NATO as a weapon. He resigned and returned to China to become a teacher at Jilin University. He used his own money to ask the school for a 40-square-meter house and opened a tea house to provide free coffee and carry out the "one cup of coffee to absorb cosmic energy" campaign. We obtained authorization from his family and used his name to create a non-profit online platform called Huang Danian Tea House, which allows everyone to access the world's scientific and technological information for free. At the same time, we opened the trumpet to basic research and cooperated with major universities. These are strategic investments and are not subject to assessment. For basic theory, we have established a mechanism internally. We don't know when it will be done, and we don't make any requirements for scientists.

　　"One of the goals of socialism is to develop society"

　　Q: American economist Richard Wolf and other experts believe that the reason why the United States does not have a high-speed rail system as developed as China is mainly because the United States follows the capitalist road and makes money in everything it does. China follows the socialist road, and the country advocates social benefits. High-speed rail, heavy-duty railways, advanced power grids, developed highways, cement roads leading to villages, water conservancy facilities everywhere, and power plants scattered all over the place... These do not make money, but they have laid a developed social foundation and contributed to the modernization of industry and agriculture, reflecting the social value of state-owned enterprises. For competitive commodities, marketization is implemented, and market competition is used to regulate them so that they can realize their commercial value and contribute to society by paying taxes in accordance with the law. What do you think about this?

　　A: Why can't socialism do things that don't make money? One of the purposes of socialism is to develop society. The socialist market economic system that our country has developed is a great feat. From the perspective of infrastructure construction, we can only take the path of socialist market economy, otherwise high-speed railways, highways, dams... these things cannot be built.

　　Q: What do you think about the future prospects of artificial intelligence?

　　A: Artificial intelligence may be the last technological revolution in human society, and of course there may be nuclear fusion of energy. The development of artificial intelligence will take decades or even hundreds of years. Don't worry, China also has many advantages.

　　Q: What do you think of these advantages?

　　A: China has hundreds of millions of young people, and they are the future of the country. The General Secretary has said that the prosperity of a country and a nation is always supported by the prosperity of culture. The key to artificial intelligence in technology is to have sufficient electricity and a developed information network. The development of artificial intelligence requires power guarantee. China's power generation and power grid transmission are very good, and the communication network is the most developed in the world. The ideal of East-West computing is possible.

　　Q: What are the other advantages?

　　A: There is no need to worry about the chip problem. Using methods such as superposition and clustering, the calculation results are comparable to the most advanced level. In terms of software, there will be hundreds of open source software to meet the needs of the entire society in the future.

　　Q: How do you view China’s future?

　　A: Friedman left our company and bought a second-class high-speed rail ticket to experience China. He later wrote an article titled "I Saw the Future, and It Was Not in the United States."

　　Q: We read this article, and he believes that "the reason why China's manufacturing industry is as strong as it is today is not only because of its high quality and ability to produce things cheaper, but also because it can produce things faster, better, and smarter, and is increasingly incorporating artificial intelligence into its products."

　　A: Fundamentally speaking, the algorithms are not in the hands of IT people, but in the hands of power experts, infrastructure experts, coal experts, medical experts, and experts in various industries... From a practical perspective, China's manufacturing industry is using artificial intelligence very quickly, and many Chinese models will be born.

　　Question: What kind of support does the state need for the development of private enterprises?

　　A: The rule of law and marketization, the government administers according to laws and regulations. Enterprises mainly create value, make technological breakthroughs, abide by laws and regulations, and pay taxes according to law. This harmonious development model will gradually release economic vitality.

　　Question: How do you view openness and development?

　　A: The country is becoming more and more open, and openness will drive us to make further progress. Under the leadership of the Party, the country is administratively unified, and government orders are accessible. It is possible to gradually form a unified large market, which will surely break through all blockades and achieve great rejuvenation.