Huawei

Huawei launched HarmonyOS 7, introducing an “intent-as-service” model and the Intelligent Agent Framework 2.0. Its AI assistant, Xiaoyi, now controls over 2,100 system capabilities and integrates with 2,000 third-party AI agents. This positions HarmonyOS for an “agent era,” building on its growing market share in China, where it has surpassed iOS. The OS leverages Huawei’s openPangu 2.0 foundation model for enhanced performance.

Nvidia CEO Jensen Huang admitted the company has “largely conceded” the Chinese AI chip market to Huawei due to US export restrictions. Despite this, Nvidia reported record financial results, with revenue soaring to $81.62 billion. Huang expressed no expectation of near-term market re-entry into China, focusing instead on global expansion and supporting its supply chain amidst massive AI economy growth.

Despite ambitious AI chip development, Huawei’s external cloud revenue declined 3.5% in 2025, contrasting with competitors’ growth. This occurs as China races for AI self-sufficiency amid U.S. chip restrictions. While overall cloud revenue and R&D investment increased, Huawei’s core ICT infrastructure segment saw slower growth. This lags behind rivals like Alibaba and Tencent, and ByteDance’s rapidly growing AI cloud business.

China’s AI chip sector is rapidly advancing, with startups and tech giants like Huawei striving to challenge Nvidia. Fueled by substantial government investment and a robust energy infrastructure, Chinese companies are accelerating domestic chip development. While still trailing U.S. counterparts, the performance gap is narrowing significantly, positioning China to become a major force in AI hardware.

China’s AI chip self-sufficiency drive sees investor interest in newly public firms like Biren and Moore Threads. However, tech giant Huawei and its HiSilicon division are considered the true leaders, offering a comprehensive ecosystem rather than just individual chips. Analysts predict Huawei could dominate China’s market, especially if Nvidia faces export restrictions. Production constraints at SMIC, with Huawei receiving priority, pose challenges for smaller rivals. Huawei’s private status is expected to continue, supported by its strong existing businesses and government backing.

Despite U.S. restrictions on advanced chip exports, China is making strides in AI development by leveraging domestically produced chips and strategic advantages. Huawei’s cluster approach links multiple chips to rival Nvidia’s performance. China’s access to affordable energy, driven by investments in renewables and nuclear, supports the high power consumption of these clusters. Government subsidies further incentivize the use of domestic hardware. The long-term challenge remains bridging the performance gap as Nvidia and TSMC innovate, given ongoing technological restrictions.

Nvidia CEO Jensen Huang defends selling advanced semiconductors to China, citing mutual benefits despite national security concerns and U.S. export controls. He acknowledges China’s AI leadership and significant market potential, estimating it at $50 billion this year. Huang also highlights Huawei’s technological prowess, emphasizing that underestimating China’s capabilities would be “foolish”. He believes collaboration serves both countries’ interests amid rising tensions.

China has banned semiconductor research firm TechInsights, citing national security, from engaging with Chinese entities amid scrutiny of its chip industry. This action, following TechInsights’ report on Huawei’s AI chips revealing reliance on foreign components, raises concerns about transparency in China’s semiconductor advancements and its goal of self-sufficiency. The ban is seen as an attempt to control the narrative surrounding China’s chipmaking progress, especially as it aims to challenge US dominance in AI chips. Huawei’s reliance on international suppliers, despite US restrictions, adds complexity.

A visit to Huawei’s Shanghai Acoustics R&D Centre revealed their ambitious push into automotive sound engineering. Huawei combines objective measurements with psychoacoustic principles, aiming for audiophile-grade sound in vehicles. The HUAWEI SOUND ULTIMATE Series features innovations like seat-specific 4D surround sound, tangential force woofers, and independent sound zones. Huawei’s significant R&D investment challenges established players, but scalability, cost-effectiveness, and consumer adoption will determine their success in the automotive market.

At Huawei Connect 2025, Huawei detailed its plan to open-source its AI software stack by year-end, including CANN, the Mind series, and OpenPangu models. This move aims to address developer challenges and foster collaboration. CANN will offer open interfaces for its compiler, while the Mind series development environment commits to full open-source. Huawei also plans to open-source its UB OS Component for flexible OS integration and prioritize compatibility with PyTorch and vLLM. The success hinges on initial release quality, community support, and clear governance.