It breaks but does not break because it rises from its ashes. This is not a description of the Phoenix but rather the journey of Huawei, a company with few equals in the tech world first of all, because it is a huge group with more than 200,000 employees, active in 170 countries and a leader in telecommunications, as well as in product development.

Everyone is aware of the implications for the Shenzhen-based company following the ban imposed by the United States in 2019, which forced it to revise its plans, abandon smartphone sales in European markets and invest in the development of a proprietary operating system.

However, Huawei is not just about products; its leadership comes from telecommunications and its ability to do business with governments and private individuals. This is something that its detractors link to the company’s close ties with the Chinese government, despite Huawei’s denials.

The AI battle between Huawei and Nvidia

At an event in Berlin, the company unveiled its new Watch Fit 4 Pro and Watch five wearables for European markets. However, the most important game for Huawei is being played elsewhere. At the centre of the stage are artificial intelligence chips, where the Chinese group is battling Nvidia, the US company led by Jen-Hsun Huang, which has become very important on a global scale thanks to the lucrative AI chip market.

In recent days, the US Department of Commerce published a directive stating that the use of Huawei’s Ascend AI chips violates US export control regulations. The document specifies that the ban applies worldwide, as the purchase of Huawei chips could result in sanctions or criminal investigations in the United States for any company.

With the Ascend 910D AI chip promising better performance and power consumption than NVIDIA’s H100, the US administration’s warning is intended to prevent Huawei from gaining a foothold in a strategic market that currently requires a huge amount of AI chips.

As Nvidia and AMD are unable to meet the entire demand, Huawei would have a clear path to place its processors necessary for the development of generative artificial intelligence. This possibility frightens the US.

The ability to resist

At the same time, however, Chinese companies with global ambitions could be at risk if they use Huawei’s Ascend chips. Deterring these companies from doing business with Huawei is one of the US administration’s goals.

The US move came even before Huawei unveiled its new AI chips, prompting a swift response from the Chinese government, which called the preventive ban announced by its geopolitical adversary an “extraterritorial regulatory measure“.

The scenario seems to replicate what happened during the first Trump administration with regard to 5G technology, only now the target is artificial intelligence processors. Despite the obstacles, Huawei is proving for the second time that it has the ability to find other ways to stay at the top of the market, both in terms of components and technological development and in the sale of electronic devices.

This result has been achieved thanks to substantial investments in research and development, which are necessary to bring innovation and remedy the restrictions imposed on exports to Beijing, the most recent example of which is the attempt to block AI-dedicated chips.