America Must Aggressively Counter Huawei to Preserve Its AI Leadership

A merica’s technological leadership is a hard-won advantage that China is determined to seize. No company better captures that drive than Huawei, a Chinese national champion with reach across telecom, smartphone, and advanced computing systems once thought beyond the country’s grasp. Huawei’s rapid rise poses a grave challenge that America must answer by innovating faster than China’s rising tech dragon.

Huawei is converting its revenue into the R&D firepower it needs to challenge — and ultimately replace — America’s technology. Huawei’s Ascend AI chips and suite of AI tools, processors, and operating software are aimed at building a complete AI ecosystem for domestic substitution and, ultimately, global competition. If the United States does not recalibrate its strategy and create the most globally competitive AI technology, it risks ceding the future of artificial intelligence and the global digital economy to Chinese companies. Huawei tried to create a complete monopoly of the world’s 5G networks in 2020. President Donald Trump stopped them in his first term. We now must take a similar approach with AI.

Huawei’s recent growth has demonstrated its adaptability to the global tech race and Washington’s efforts to restrict its dominance. China has been forced to accelerate domestic production of AI chips to substitute its supply from U.S. chipmakers at breakneck speed, prompting Huawei to pour resources into its designs. The results are now plainly visible. In 2025, domestic Chinese suppliers, including Huawei, captured a rapidly growing share of China’s AI chip/accelerator market, now over 40 percent. Huawei has secured a significant position in the country’s tech market and has plans to ramp up production further in the year ahead. Analysts project Huawei could command more than half of China’s AI chip market by the end of 2026.

This poses a genuine threat to the U.S. innovation ecosystem. Huawei’s chips still lag behind top U.S. products in performance and power efficiency, and its software trails in developer adoptions and optimization, but it is catching up fast. Huawei made real improvements for its new 950 chip series that led to a reported 750,000 orders from Chinese tech giants. In addition, Huawei expects to sell 600,000 prior-generation chips in 2026. Global expansion is happening as well. In April, Huawei Cloud launched Model-as-a-Service in nine more countries overseas, enabling its pre-trained AI models to be exported abroad.

Huawei’s market recapture is generating the cash it needs to fund its next leap. In 2025, the company reported revenue exceeding $127 billion and plowed nearly 22 percent of that revenue into research and development. That level of sustained investment is the kind that built American leadership in semiconductor design and innovation over decades, even as manufacturing leadership shifted toward specialized foundries in Taiwan. Much of that revenue now comes from inside China, where Huawei’s phones, telecom gear, and cloud services face less restrictions than foreign competitors. The money those companies make flows straight into chip design, manufacturing improvements, and the software ecosystem needed to make China’s chips more competitive globally.

Huawei has accelerated its chip development specifically to help domestic tech companies compete with their global peers. Beijing’s strategy is to use the protected home market as a revenue generator to bankroll its long march toward technological self-sufficiency. Chinese leaders speak openly of replacing American firms across the AI landscape and around the world. Huawei is working rapidly to build an alternative ecosystem that could erode U.S. competitiveness in everything from 5G to AI inference, a critical capability by which trained AI models can predict and understand user inputs. Huawei could soon be exporting Chinese AI tech around the world in a repeat of its global integration and primacy in telecommunications, which Trump prioritized unwinding in his first administration. This time, we have to act before Huawei can put down roots worldwide in the most important technology of this century.

The United States still holds decisive advantages, but such advantages will atrophy if ignored. To prevent Huawei from dominating global markets and cycles of innovation, Washington must treat the Huawei challenge with the urgency it deserves and create policies that encourage global adoption of American-made AI technology and American competitiveness within the Chinese market.

The winner of the AI race will be the ecosystem that supports the most AI developers and wins the biggest global market share. It is critical to proliferate American AI infrastructure around the world as quickly as possible before China can diffuse its full technology stack, including programming languages, datasets, software, hardware, and infrastructure tools.

AI is the foundational technology of the 21st century, and whoever has the world’s most competitive commercial-technological base will be the global superpower. In the century ahead, that will be the country that wins the race for global adoption of its full AI stack. If Huawei’s domestic revenue continues to subsidize rapid innovation, it can close the performance gap through sheer volume and government support. Improvements to Huawei’s platform also directly benefit the Chinese military and enhance their ability to fight wars with custom AI hardware platforms tailored to their mission requirements. Failure to counter this challenge with better policy, sustained investment, and unrelenting focus will result in the future of technology being determined in Beijing.