Huawei’s efforts to develop its own AI chip have not yet translated into significant revenue growth, as the company reported a 3.5% decline in cloud revenue from external customers for 2025, totaling 32.16 billion yuan ($4.6 billion). While overall cloud revenue rose by 4.8% to 72.8 billion yuan, the slowdown in the main ICT infrastructure segment, which includes Huawei’s Ascend AI chip solutions, raises concerns about its competitive position against U.S. firms like Nvidia. This comes as Chinese rivals such as ByteDance and Alibaba report substantial growth in their cloud segments.

The broader context reveals a rapidly expanding global cloud market, with a 29% increase in spending on cloud infrastructure services in the fourth quarter of 2025. In contrast, Huawei’s modest performance highlights the challenges it faces amid U.S. sanctions and a sluggish domestic economy. As competitors like ByteDance gain momentum, Huawei’s market share could be at risk.

For market professionals, the key takeaway is the potential for increased competition in the Chinese cloud space, particularly as local firms leverage partnerships to enhance their AI capabilities. This could impact Huawei’s future growth trajectory and its ability to maintain its position as a leading cloud provider in China.

Source: cnbc.com