Huawei expects its revenue from artificial intelligence chips to rise by at least 60% this year, driven by strong demand from Chinese companies for domestically produced products, the Financial Times reported on Friday.
The company anticipates revenue from these chips to reach approximately $12 billion, based on existing orders, compared to around $7.5 billion in 2025, according to sources familiar with the matter.
US restrictions hinder Nvidia and reshape the market
Nvidia faces ongoing regulatory hurdles between Washington and Beijing. Despite CEO Jensen Huang’s announcement in March that the company had obtained US licenses to sell its H200 chips to China, shipments have yet to commence due to regulatory complexities.
Financial Times sources indicate that Chinese authorities have instructed technology companies to support local suppliers and limit the use of Nvidia chips within the domestic market, while US regulators restrict the use of these chips to within China only. A persistent technological gap… but Huawei is betting on inference.
Although Huawei’s latest chips are still at least two generations behind Nvidia’s more advanced products, the company has gradually succeeded in improving performance and efficiency.
Huawei is focusing on marketing its processors as the preferred choice for inference, the computational processes used by large language models to generate answers. These processes are less complex than model training but are poised to become the biggest driver of future demand as artificial intelligence applications proliferate.
The software battle… a weak point for Nvidia.
Software remains a major challenge for Chinese competitors. Nvidia’s KODA platform dominates globally, while Huawei’s Kan platform faces difficulties in use, increasing operating costs for customers despite ongoing improvements. In this context, Morgan Stanley predicts that the Chinese AI chip market will reach $67 billion by 2030, with domestic companies accounting for approximately 86% of the supply, compared to around $21 billion for the domestic market this year.
Nvidia previously dominated the market, achieving sales of $17.1 billion in its fiscal year 2025, mostly from its H20 chip, which was specifically designed to meet US restrictions before being subsequently banned.
Morgan Stanley’s analysis suggests that the market is being shaped by two key factors: the rapid growth in demand for inference and the continuation of export restrictions, making the localization of chip manufacturing in China a long-term trend rather than a temporary response.
