Nvidia CEO Jensen Huang has issued a strong warning about the future of artificial intelligence. He said that if DeepSeek’s upcoming AI model runs entirely on Huawei chips, it could be a “horrible outcome” for the United States. His concern is that global AI systems may start shifting away from US technology, which could weaken America’s leadership in this space.

DeepSeek V4 Could Change the Game

The upcoming DeepSeek V4 model, expected later this month, is already creating buzz. Reports suggest it could run on Huawei’s Ascend chips, marking a major shift from the current reliance on Nvidia GPUs. However, some signs indicate it may still support Nvidia’s latest Blackwell architecture. If DeepSeek fully moves to Huawei hardware, it would be the first major AI model to break away from the US ecosystem.

China’s Different Approach to AI

Huawei’s chips are still considered slightly behind US alternatives in raw power. But China is focusing on a different strategy. Instead of relying on the most advanced chips, companies are using more chips together and improving software efficiency. Techniques like Mixture-of-Experts help boost performance without needing the best hardware.

Strength in Scale and Resources

China has key advantages that support this approach. It has a large pool of AI talent and access to cheaper energy. This allows companies to run massive computing setups. Even with weaker chips, using many processors at once can deliver strong results.

Rising Tensions and Policy Pressure

The situation is becoming more complex due to growing US–China tensions. Lawmakers in the US are pushing for stricter restrictions on Chinese AI firms. At the same time, some chip supply decisions suggest partial easing, showing mixed signals from policymakers.

This is no longer just about hardware power. The real battle is shifting toward software, efficiency, and ecosystem control. If DeepSeek succeeds with Huawei chips, it could mark a turning point in global AI, potentially reshaping who leads the industry in the coming years.

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Key Highlights:

• U.S. government has officially blocked Nvidia from selling its advanced Blackwell and B30A AI chips to China.
• China has responded with a new rule banning foreign AI chips from all state-funded data centers.
• Global AI chip war deepens as both nations tighten technology controls

White House Blocks Nvidia’s Advanced Blackwell Chip Sales to China

The Trump administration has decided not to allow Nvidia to sell its latest Blackwell AI chip to China. White House spokeswoman Karoline Leavitt confirmed the decision, stating, “The Blackwell chip is not something we’re interested in selling to China right now.”

This decision follows months of speculation about whether a scaled-down version of the chip might be cleared for sale. The move aligns with President Trump’s strategy to maintain America’s technological edge in artificial intelligence and prevent China from acquiring high-end U.S. hardware.

US Treasury Secretary Calls Blackwell the “Crown Jewel”

U.S. Treasury Secretary Scott Bessent described Nvidia’s Blackwell chip as the “crown jewel” of American AI innovation. He indicated that sales to China might be reconsidered only after the chip becomes outdated in 12 to 24 months. According to Bessent, Nvidia’s rapid pace of innovation means that the Blackwell could soon be several generations behind the company’s latest models.

Nvidia’s Market Collapse in China

Nvidia’s position in China has deteriorated sharply. Once controlling 95% of the Chinese AI data center market in 2022, the company now holds no market share. CEO Jensen Huang has expressed hope that Nvidia will eventually return to the Chinese market, but admitted there are no current plans to do so. Nvidia is reportedly redesigning its B30A chip in hopes of meeting future U.S. export conditions.

China Retaliates with Ban on Foreign AI Chips

In a direct response, Beijing has ordered that all new data centre projects receiving state funding must use only domestically produced AI chips. Projects that are less than 30% complete are required to remove or cancel any foreign chip orders, while those further along will be reviewed individually.

This directive represents one of China’s most aggressive steps toward achieving AI chip self-sufficiency. It is expected to benefit domestic manufacturers such as Huawei, Cambricon, and MetaX. However, industry analysts warn that Chinese AI chips still lag behind Nvidia’s products in performance and software ecosystem support, potentially slowing China’s AI development.

The Global AI Divide Widens

The escalating U.S.–China chip restrictions are reshaping the global AI landscape. The United States aims to secure national security and preserve its technological dominance, while China seeks independence from U.S. technology and to strengthen its domestic semiconductor ecosystem.

While American tech giants like Microsoft, Meta, and OpenAI continue to build massive AI data centres using Nvidia’s most advanced chips, China risks falling behind in computing capacity despite gains in local chip production.

Both the U.S. and China are pursuing self-reliance in AI technology, setting the stage for a deeper divide in global innovation. The U.S. is safeguarding its AI lead, while China is accelerating its domestic semiconductor push. 

Nvidia and other American chipmakers are losing access to one of the world’s largest markets, while Chinese chip firms stand to benefit, though at the cost of slower advancement in high-end AI capabilities.

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Arm has just announced that its latest A9 architecture could potentially be licensed to Huawei Technologies. This could ease the latter’s supply chain issues and is possible since the new chip technology is of British origin.

According to a SCMP report, the British chip maker will be able to supply the Chinese tech giant with its latest chips since it is not subject to the US trade regulations. This would undoubtedly be great news for Huawei, as its advanced chip designer unit HiSilicon has lost access to advanced chip technology that originated from America due to US sanctions.

Ian Smythe, vice-president of solutions marketing at the Arm stated during a media event in Beijing earlier this week that “Following a comprehensive review, Arm has determined that its Arm v9 architecture is not subject to the US Export Administration Regulations.” He further added that the company has also shared its review to the appropriate US government agencies as well.

For those unaware, ARM sells processor designs and licenses its instruction set to various companies including, Apple, Samsung Electronics, and even Qualcomm. In other words, the company’s technology has a big impact on the smartphone industry, which is now also gaining a foothold in other markets such as personal computers and servers.

Its new V9 architecture that was launched by Arm earlier this week in the UK can be licensed to HiSilicon as it is not covered by US restrictions, as per a company spokesperson. Although, it is unknown if Huawei has moved to license the chip maker’s new V9 architecture and has also yet to comment on the matter. So, stay tuned for more updates.

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A new leak has revealed that Huawei is diversifying its chip business even further and will now also be making display driver chips as well. The Chinese tech giant is entering the industry to offer display driver chips according to Weibo tipster @长安数码君.

The leak on the Chinese microblogging website shared a document, which was titled “Notice on the establishment of the terminal chip business unit in the field of display driver products,” by Huawei’s Yu Chengdong (or Richard Yu). In the notice, it was stated that most major producers had display driver chips imported from abroad. For those unaware, these chips are key components of the display and act as the brain behind the whole operations.

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Thus, it seems like Huawei plans on producing these chips as well, to keep the supply chain local for other Chinese brands and gaining a new market to sell to. At the moment, the company has 5 different lineups of chips including Kirin for smartphones, Kunpeng chips for servers, Ascend AI Chips, GigaHome for routers, and Honghu for smart displays.

Despite China being a major producer and exporter of displays, the region only has local display driver chips worth 5 percent in the market. These chips are specifically designed for LED screens and have brought a quantum leap in the technology. With China being such a large market for such technology it arrives as no surprise that Huawei is diversifying to these types of chips as well.

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The US ban did hit Huawei in several aspects apart from its smartphone hardware and software parts supply. The ban ensures Huawei was unable to procure the computer chips called base station that is an integral component of the company’s newly introduced high-speed (5G) wireless networks. Huawei, according to its US-based executive Tim Danks, was able to manufacture the base station.

The exec also disclosed that Huawei sold over 50,000 of the next-generation base stations that didn’t have any vestiges of the US at all. This is yet another proof that the company is gradually attaining self-reliance for technological components. However, the sales figure represents just 8% of the total base stations sold by Huawei in February as a total of 600,000 were shipped out.

A base station is a typically suitcase-sized piece of machinery that’s used to help connect wireless phones to fixed-line networks carrying internet traffic, and it’s an essential ingredient in the next, or fifth, generation of mobile networks. Popular among telecommunications providers, Huawei’s base stations are widely considered among the most reliable for the price.

The company is looking to ramp up production on its Hisilicon chip division in order to manufacture more base stations, the exec disclosed. He added that Huawei was still interested in using U.S. technology but is unlikely to return to using them.

Huawei recently unveiled its own HMS as an alternative to GMS. We had earlier reported of fears over if the US will compel TSMC to stop supplying Huawei silicon chips. As a result, Huawei is already working on alternatives to TSMC and SMIC is one of such suppliers that is being positioned if the unexpected happens.

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