During a recent keynote speech at the Center for Strategic and International Studies (CSIS), NVIDIA Corporation CEO Jensen Huang gave a rare and honest warning about the growing global influence of Chinese technology companies, especially Huawei, in the field of artificial intelligence. He made it clear: if U.S. companies don’t take decisive action, Chinese competitors will dominate AI technology markets worldwide using strategies similar to their successful 5G “Belt and Road” export model.
China’s ambitions in AI go beyond just developing technology for its own use. The country is actively pursuing what industry experts are now calling the AI Belt and Road Initiative—a plan to export Chinese AI technology, infrastructure, and expertise to partner countries in Asia, Africa, and beyond. This initiative is a natural progression of China’s broader technology goals, using the same tactics that helped Huawei gain significant market share in global telecommunications.
Huawei is leading this technological effort with its self-developed Ascend AI chips that aim to compete with NVIDIA’s top products. The importance of Huawei and other Chinese companies like Cambricon and Biren in reshaping the global AI landscape cannot be overstated—they’re creating an independent, scalable ecosystem that has the potential to redefine competition in one of the most critical sectors of technology.
The Rise of China’s AI Industry and Domestic Chip Production
One standout product is Huawei’s Ascend 910C chip, which boasts over 90% of its components sourced domestically and an impressive performance capability of 800 TFLOPS. Mass production of this chip has already started, with an expected annual sales volume of 700,000–800,000 units by 2025.
The growth of China’s AI industry is further supported by research from Bernstein Research, as reported by Jukan, which indicates that the supply of AI chips in China is projected to exceed domestic demand by 2028. This surplus capacity suggests that Chinese manufacturers are not only focused on their local market but also have plans for global expansion.
The semiconductor production capabilities that China has developed over the years are a result of strategic investments made by the country. This shift represents a move away from relying on foreign technology towards becoming self-sufficient—and potentially even dominating the market.
What’s significant about this transformation is that it goes beyond just experimental prototypes. These are fully developed systems ready for mass production, and they are entering the market backed by the world’s second-largest economy.
Huawei’s Strategic Approach: From 5G Success to AI Globalization
Huawei’s strategy for expanding into AI markets is similar to its successful approach with 5G. It involves aggressively entering new markets and forming strong partnerships with local companies. This strategy has already transformed telecommunications infrastructure in many developing countries.
We can see this pattern clearly in Thailand, where Huawei collaborated with China Unicom and Midea Group to implement smart factory solutions that boosted productivity by an impressive 37%. Another compelling case study is Malaysia, where Huawei successfully deployed a cost-effective 5G network that covers 80% of the country, establishing itself as an essential technology partner.
Now, Huawei is applying its proven strategy of “exporting technology while operating locally” to the AI market. Instead of just selling hardware products, Huawei aims to create comprehensive ecosystems by undertaking infrastructure projects and forming partnerships. These initiatives will establish long-term dependencies on its technology and services.
This approach also positions Chinese competitors favorably by allowing them to capture markets before Western alternatives can gain a foothold.
Energy and Infrastructure Advantages Powering China’s AI Ambitions
Huang Renxun specifically pointed out that, China has double the total energy capacity of the United States, giving it an edge for large-scale AI training operations. This extensive energy infrastructure allows Chinese AI companies to run demanding workloads at prices that American rivals find hard to match.
The energy advantage extends beyond China’s borders through Belt and Road partnerships. Chinese firms are actively replicating this low-cost infrastructure model across partner nations, many of which possess untapped renewable energy resources. Countries along the Belt and Road routes gain access to affordable AI infrastructure deployment, while Chinese companies secure strategic footholds in emerging markets.
Emerging Trends Defining China’s AI Global Expansion (Next Two Years)
The momentum behind China’s AI export strategy is accelerating at an unprecedented rate. Recent financial disclosures reveal overseas revenue growth rates for Chinese AI firms soaring at an average annual rate of 45%—far outpacing domestic growth. This surge reflects a fundamental shift in how Chinese technology companies approach international markets.
Looking ahead over the next two years, three clear trends will define China’s AI globalization wave:
- From Pilots to Products
Chinese AI companies are moving beyond one-off implementations. The focus now centers on developing scalable productized solutions that can be deployed rapidly across multiple countries without extensive customization. You’ll see standardized AI platforms replacing bespoke projects, enabling faster market penetration and reduced deployment costs. - Building Regional Data Ecosystems
The expansion strategy extends far beyond selling hardware or software. Chinese firms are establishing cross-border data collaborations that create regional data alliances in critical sectors like healthcare and transportation. These alliances allow participating countries to pool data resources while maintaining local control, creating network effects that strengthen China’s position as the central technology provider. - Unified Ecosystem Approach
Individual company efforts are giving way to integrated ecosystem partnerships among major players like Huawei, Alibaba, and SenseTime. This coordinated approach delivers comprehensive end-to-end solutions—from chips to cloud services to application layers. The strategy mirrors Jensen Huang’s warning about the “then build ecosystem” approach, where early market entry creates dependencies that become difficult to displace.
Challenges and Risks in China’s AI Belt and Road Vision
The July World Artificial Intelligence Conference (WAIC) in Shanghai marked a significant milestone with the announcement of a new World Artificial Intelligence Cooperation Organization alongside the publication of a Global Governance Action Plan for AI. In September, the Shanghai AI Research Institute released its inaugural “Belt and Road AI Application Scenarios Report,” signaling China’s intent to formalize its AI expansion strategy. This rising tide brings complex challenges around data sovereignty and technology dependency that require careful navigation to balance commercial gains with shared global benefits.
- Data Sovereignty Challenges
Partner nations along Belt and Road routes face difficult decisions regarding data sovereignty. Accepting Chinese AI infrastructure often means sharing sensitive data with systems that may not align with local privacy standards or regulatory frameworks. Countries must weigh the immediate benefits of affordable AI solutions against long-term concerns about who controls and accesses their citizens’ information. - Technology Dependency Risks
Technology dependency risks compound these concerns amid escalating geopolitical tensions between the US and China. As nations become increasingly reliant on Chinese AI chips, cloud services, and training platforms—creating vulnerabilities amid escalating political tensions affecting AI market access, the situation is further complicated by China’s semiconductor industry challenges. The US-China technology competition forces partner countries into choosing sides, potentially limiting their access to Western AI innovations while deepening commitments to Chinese ecosystems. - Fragmentation of Global AI Governance
The new World Artificial Intelligence Cooperation Organization represents China’s attempt to shape global AI governance frameworks, challenging existing Western-led standards and establishing parallel regulatory structures that may fragment the international AI landscape.