huawei chip ban: us cracks down, global ai landscape shifts

2025-05-14 general

singapore, Wednesday, 14 May 2025.
the us commerce department has declared that using huawei’s ascend ai chips anywhere is a violation of export controls. this unprecedented move intensifies the tech war, potentially impacting any global company utilizing these chips. the us is simultaneously scrapping the biden-era ai diffusion rule, signaling a major policy shift. this could leave companies scrambling and reshape the competitive landscape, particularly as huawei claims its ai chip clusters outperform nvidia’s in key areas like total computing power.

export control implications

The U.S. Commerce Department’s guidance clarifies that using Huawei’s Ascend AI chips, including the Ascend 910B, 910C9, and 910D, violates U.S. export controls, potentially triggering penalties for global companies [1]. Akin Gump’s senior export control lawyer, Kevin Wolf, stated this isn’t a new rule but confirms that using Huawei’s advanced computing designs breaches export regulations [1]. This action aims to prevent China from leveraging advanced chips to bolster its military systems and AI dominance [4]. Companies must now scrutinize their supply chains to avoid technology transfer risks [4].

nvidia’s strategic positioning

Nvidia stands to gain significantly from these restrictions. Nvidia CEO Huang Renxun has acknowledged Huawei as a major competitor [5]. With Huawei’s chip usage now restricted, Nvidia could see increased demand for its AI chips [1]. The U.S. is encouraging allies to adopt American technology, creating opportunities for Nvidia to expand its global market share [5]. Simultaneously, Nvidia is expanding its reach in the Middle East, with a deal to supply over 18,000 AI chips to Saudi Arabia’s Humain [4]. This move could offset losses from restricted access to the Chinese market [4].

market reactions and expert opinions

Experts suggest these restrictions aim to freeze China’s AI chip development at a mature level, preserving the technological lead of democratic nations [4]. East Wu University lecturer Lin Xiu Min highlights that high-end technology is inseparable from national defense [4]. He points to the recent India-Pakistan conflict, illustrating how chip technology dictates modern warfare, emphasizing the importance of ‘computing power’ [4]. This perspective underscores the long-term strategic implications of the U.S. actions for investors to consider [4].

policy shift and future outlook

The U.S. Commerce Department has also rescinded the Biden-era AI Diffusion Rule, which would have imposed tiered export controls [1][3]. The Trump administration viewed the rule as overly bureaucratic and damaging to diplomatic relations [2][3]. Instead, the U.S. aims to collaborate with trusted nations on AI technology while preventing access by adversaries [2][4]. This policy shift indicates a more flexible approach to AI export controls, potentially favoring bilateral agreements over broad multilateral restrictions, influencing long-term investment strategies [2].

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