U.S. official warns Huawei can only produce 200,000 AI chips in 2025

The U.S. Commerce Department has warned lawmakers that Huawei Technologies will unlikely produce more than 200,000 advanced artificial intelligence chips in 2025.

This figure falls short of China’s demand but signals growing momentum in the country’s bid to rival U.S. chip supremacy.

U.S. warns against complacency as China ramps up AI chip investments

Jeffrey Kessler, Under Secretary of Commerce for Industry and Security, told a congressional hearing on Thursday that while Huawei’s projected output remains limited, it should not breed complacency in Washington. “China is investing huge amounts to increase its AI chip production, as well as the capabilities of the chips that it produces,” Kessler said.  He noted that they needed not to have a false sense of security.

The comments underscore rising tensions between Washington and Beijing as China pushes to close the technological gap with the West. 

Since 2019, Huawei and other major Chinese firms have faced sweeping U.S. export restrictions that bar access to high-end American chips and manufacturing tools. These measures are part of a broader effort to curb China’s military and technological advancement.

Huawei pushes ahead with ascend chips despite U.S. sanctions and supply limits

Despite sanctions, Huawei has continued developing its Ascend 910C AI chips as a domestic substitute for Nvidia’s cutting-edge GPUs, which dominate the global market but are now largely unavailable to Chinese firms due to U.S. controls.

Kessler told the House Foreign Affairs Subcommittee on South and Central Asia that the bulk of Huawei’s chips will likely be used within China. “Our assessment is that Huawei Ascend chip production capacity for 2025 will be at or below 200,000,” he stated.

His warning came days after White House AI Director David Sacks said China was only three to six months behind the U.S. in artificial intelligence capabilities. A White House clarified later that while China’s AI models are close to parity, its AI chips trail by one to two years.

Still, Huawei is rapidly trying to bridge that gap. CEO Ren Zhengfei told Chinese state media this week that the company’s chips remain a generation behind their American counterparts but that Huawei is pumping more than $25 billion annually into research and development to close the divide.

Trade tensions persist as tech race shapes U.S.–China dialogue

Meanwhile, Nvidia has seen its market share in China erode due to the restrictions on exporting its most advanced chips. The company is barred from selling its top-performing AI hardware to China, though it continues to ship lower-tier versions.

The semiconductor face-off is part of a more sweeping geopolitical clash, too. During talks in London this week, there was a tentative trade truce between U.S. and Chinese officials after disputes over China’s restrictions on the exports of crucial minerals. The Trump administration has also threatened to curb sales in other sensitive areas like semiconducting design software and aerospace components.

Although Democratic lawmakers have expressed concerns over mixing export controls into trade negotiations, Kessler insisted the Commerce Department closely monitors the process. He notes there are strong export controls, and he is confident they will remain strong. Kessler also said he is not currently planning new restrictions, but everything is subject to change.

“It’s a constantly evolving landscape, and we need to ensure that our controls remain effective,” Kessler said.

The U.S. government’s tightrope walk between national security and global trade continues, as China’s growing tech ambitions force Washington to reassess its strategic position in the AI arms race constantly.

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