Huawei bid to build Egypt’s AI data centres, and Washington is scrambling

Huawei has bid to build AI data centres for the Egyptian government. The US State Department is now trying to assemble a rival consortium from Nvidia, AMD and Microsoft.

The tender offer proposes exporting 1,408 of Huawei’s top-end Ascend 950-series chips for an AI training cloud. A further 600, either the same chips or the older 910B, would run two inference clusters. Huawei set out a 12-month build.

Mackenzie Hawkins reported the bid for Bloomberg, from people familiar with the matter and documents she reviewed. Gao Yuan and Matt Day contributed.

It would be the first Ascend export anyone has confirmed

Huawei has spent more than a year trying to sell these chips abroad without a completed deal. Last year it approached buyers in the Gulf and Southeast Asia with a couple of thousand processors. It offered only its second-best model, because production of the better 910C was too low.

This time it is offering the 950DT, which sits above the 910C. Huawei touted those chips at an event in South Korea last year, and the head of its Latin American cloud business told the South China Morning Post it is studying whether to sell them there too.

Huawei declined to comment. Egypt’s foreign ministry did not respond to Bloomberg’s questions.

The volume is small and that is part of the point

The full order comes to 2,008 chips. Under typical training parameters that is roughly the capability of a few hundred top Nvidia processors, orders of magnitude below what Western companies deploy routinely.

For Huawei, a completed sale would prove two things at once: that foreign demand exists, and that it can now supply. US restrictions on chipmaking tools have held its volumes down for years.

Small first shipments into non-traditional markets are also the playbook that made Huawei the world’s largest telecoms equipment supplier.

iFlytek is in the bid, and so is a police ministry logo

The proposal is a partnership with iFlytek, the Chinese speech and surveillance company. Both firms have been on a US blacklist since 2019.

Their joint offering includes vehicle and individual recognition, run against a national population database. It also covers what the documents call situation awareness, packaged as a “one screen panoramic view of the city”.

The presentation runs to 102 pages. On one slide, the examples given for “basic video applications” carry the insignia of China’s Ministry of Public Security.

iFlytek did not respond. Bloomberg reports it is unclear what the American proposal would offer, or whether Washington would restrict any uses of the technology it supplied.

Washington’s response is a consortium and a warning

When the Trump administration learned of the pitch, the State Department contacted Nvidia, AMD and Microsoft about a counter-bid. Microsoft declined to comment and the other two did not respond.

“Egypt is one of dozens of countries with whom we are speaking about US technology leadership on artificial intelligence,” a State Department spokesperson said. American AI “benefits the world”, they added, and the US “stands ready to partner with countries on AI development and deployment in ways that respect sovereignty and expand capabilities”.

Washington has also told the world that using certain Huawei accelerators without its approval can carry a legal penalty. Whether officials have raised that with Cairo is not known.

AI chip shipments to Egypt have needed American permission since 2023, which gives the administration leverage through the licensing process. Egypt is one of about 40 countries in that category.

Malaysia is the precedent

Malaysia announced a national AI system running on Huawei chips last year, on a similar scale to the Egyptian proposal. It then distanced itself from the project once the White House raised concerns.

“Malaysia remains committed to full compliance with all applicable export control laws,” the country’s investment ministry said at the time. It also reaffirmed its “sovereign right to formulate its policies in line with national interest”.

Malaysian customs seized a $13m chip shipment bound for re-export in June.

Why Egypt

Egypt has more than 100 million people and has been deepening ties with China across trade and military exercises. Xi Jinping travels there next week, his first visit in more than a decade.

The country’s second national AI strategy targets a 7.7% contribution to GDP by 2030, and it does not make its own chips. That leaves the US or China.

American infrastructure companies have not historically treated Egypt as a market, and it has not been a priority for Trump’s AI diplomacy. Huawei has been present there for decades. It is courting African governments on education and healthcare, including in Kenya.

The wider chip fight

Trump’s team scrapped a Biden-era plan to widen the export curbs globally, partly to avoid handing markets to Huawei. An export promotion programme for Global South countries launched over a year ago and has produced no deals. The State Department pointed to it. It would not say whether federal money is available for Egypt.

Brazil is already building two AI supercomputers, one Chinese and one American. Chinese chipmakers have been moving to custom silicon under the same pressure, and Huawei won a $1.7bn China Telecom deal in June.

At home, DeepSeek and Moonshot still run on Nvidia hardware. One Huawei scientist has argued Nvidia will hit the same wall everyone else does.

What to watch

Egypt has not said which bid it prefers, and neither side has confirmed a decision date. Bloomberg notes the tender may be the first time the US and China have competed directly for one government AI project.

Xi arrives next week. Whether the US consortium exists by then is the open question, because nobody has confirmed that Nvidia, AMD or Microsoft agreed to join one.