Huawei's attempt to construct AI data centers in Egypt has prompted a rush of activity in Washington.

      Huawei has submitted a proposal to construct AI data centers for the Egyptian government. In response, the US State Department is actively working to form a competing consortium consisting of Nvidia, AMD, and Microsoft.

      The tender includes a plan to export 1,408 of Huawei’s high-performance Ascend 950-series chips for an AI training cloud. An additional 600 chips, either the same or the older 910B models, would support two inference clusters. Huawei has outlined a 12-month construction timeline for the project.

      Mackenzie Hawkins has reported the bid for Bloomberg, drawing information from sources familiar with the matter and documents she examined. Gao Yuan and Matt Day also contributed to the report.

      This would mark the first confirmed export of the Ascend chips. Huawei has been attempting to sell these chips internationally for over a year without finalizing any deals. Previously, the company reached out to buyers in the Gulf and Southeast Asia with a few thousand processors, but only its second-tier model was offered due to limited production of the superior 910C model.

      Now, Huawei is presenting the 950DT chip, which is a step above the 910C. The company promoted these chips at an event in South Korea last year, and the head of its Latin American cloud division mentioned to the South China Morning Post that they are exploring potential sales in that region as well.

      Huawei has not provided any comments on this matter, and Egypt’s foreign ministry did not respond to inquiries from Bloomberg.

      Although the order volume is relatively small, this aspect may be intentional. The total order amounts to 2,008 chips, which under standard training conditions is approximately equivalent to the power of a few hundred top-tier Nvidia processors, significantly lower than the routine deployments of Western firms.

      For Huawei, a successful sale would demonstrate both an existing foreign demand and its capability to meet that demand, especially considering US restrictions on chipmaking tools that have limited production for years. This strategy of initiating small shipments in non-traditional markets has previously propelled Huawei to become the largest supplier of telecom equipment globally.

      The proposal also involves a partnership with iFlytek, a Chinese company specializing in speech recognition and surveillance. Both companies have been under a US blacklist since 2019. Their joint offering features vehicle and individual recognition based on a national population database, as well as what the documents describe as situational awareness, presented as a "one screen panoramic view of the city."

      The presentation extends to 102 pages, with some slides featuring examples of "basic video applications" that bear the insignia of China’s Ministry of Public Security. iFlytek has not provided a response to inquiries.

      According to Bloomberg, it remains unclear what the US proposal will entail, or if there are any intended restrictions on the usage of the technology provided by Washington.

      Upon learning of Huawei's proposal, the Trump administration's State Department reached out to Nvidia, AMD, and Microsoft regarding a counter-offer. Microsoft has not commented, while the other two companies have not responded.

      A spokesperson for the State Department stated, "Egypt is one of dozens of countries with whom we are speaking about US technology leadership on artificial intelligence," adding that American AI "benefits the world" and that the US is "ready to partner with countries on AI development and deployment in a manner that respects sovereignty and expands capabilities."

      Furthermore, Washington has indicated that utilizing certain Huawei accelerators without its permission could lead to legal consequences. It is unclear if this issue has been discussed with Cairo.

      Since 2023, AI chip shipments to Egypt have required American approval, providing the US administration with leverage through the licensing process; Egypt is among roughly 40 nations subjected to this requirement.

      As a precedent, Malaysia announced a national AI system utilizing Huawei chips in the previous year, similar in scale to the Egyptian proposal, but later distanced itself from the initiative following concerns raised by the White House.

      Malaysia's investment ministry stated at the time, "Malaysia remains committed to full compliance with all applicable export control laws," while reaffirming its "sovereign right to formulate its policies in line with national interest." In June, Malaysian customs seized a $13 million shipment of chips intended for re-export.

      As for Egypt, with a population exceeding 100 million, it has been strengthening ties with China in areas such as trade and military exercises. Xi Jinping is scheduled to visit next week, marking his first trip there in more than ten years.

      The country’s second national AI strategy aims for a 7.7% contribution to GDP by 2030, and it does not manufacture its own chips. This leaves the US or China as potential suppliers. Historically, American infrastructure firms have not viewed Egypt as a significant market, and it has not been a focus in Trump’s AI diplomacy. Conversely, Huawei has had a presence in Egypt for decades, actively engaging with African governments on initiatives in education and healthcare, including in Kenya.

      In the broader context of chip competition, the Trump administration abandoned a