Consumers browse Huawei phones at a shopping mall in Yantai, Shandong province, China, March 8, 2026.
Cphoto | Future publishing | Getty Images
Huawei’s push to develop its own artificial intelligence chip has so far failed to produce double-digit sales increases from its rivals, as Chinese companies seek to close the gap with the U.S. in AI.
Cloud computing revenue from external customers fell 3.5% to 32.16 billion yuan ($4.6 billion) in 2025, Huawei said. Although that accounts for less than 4% of Huawei’s total revenue, the company is the second largest cloud provider in mainland China.
While total cloud revenue including internal customers rose 4.8% to 72.8 billion yuan, the main ICT infrastructure segment saw revenue growth slow to 2.6% from 4.9% in 2024.
This segment includes Huawei’s self-developed Ascend AI chip solutions, which are intended to keep up Nvidia. Huawei’s total ICT revenue was 375.01 billion yuan in 2025.
The US has restricted Chinese companies’ access to the most advanced Nvidia chips, while Beijing is demanding technical independence at home.
The decline in Huawei’s cloud revenue from external customers comes as ByteDance has rapidly expanded its AI cloud business in China in recent months, albeit from a small base.
The TikTok owner is reportedly improving access to high-quality Nvidia chips as part of a partnership with a planned data center in Malaysia. ByteDance and Alibaba are also planning to place orders for Huawei’s new AI chip, Reuters reported last week, citing sources. ByteDance declined to comment. The other two Chinese companies did not immediately respond to a CNBC request for comment.
AI tools developed in the US are widely considered to be the most powerful in the world, although some Chinese models have shown a lead in video generation. Not all US AI models are officially accessible in mainland China.
Huawei’s modest cloud growth numbers are due to rapid industry expansion worldwide and slower economic growth in China.
Globally, spending on cloud infrastructure services grew 29% in the fourth quarter, marking the sixth consecutive quarter of market expansion of more than 20%, according to Omdia. The company forecasts cloud growth of 27% in 2026.
earlier this month Alibabathe largest cloud computing company in mainland China by market share, reported a 36% increase in segment revenue to 43.28 billion yuan in 2025. Tencent said higher cloud service sales at home and abroad helped business services revenue rise 22% year-on-year in 2025.
Local promotions this month in China for AI tool OpenClaw have also encouraged many locals to download the agent and pay for related cloud and AI modeling services. China’s consumer spending has remained subdued since the pandemic.
Consumer income is declining
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According to Counterpoint, Huawei smartphones ranked first in China last year, with shipments up 1.7%. But the Chinese company lost ground Apple towards the end of 2025 after the release of the iPhone 17.
For 2025 as a whole, the telecom giant reported revenue of 880.9 billion yuan, up 2%, with net profit of 68 billion, up about 8% year-on-year.
The company spent a record 192.3 billion yuan on research and development, accounting for 21.8% of revenue.
“In 2025, Huawei’s overall performance remained stable,” said Sabrina Meng, Huawei’s rotating chair, in a brief statement in which she also thanked customers, partners and employees.
The intelligent automotive solutions division posted revenue of 45.02 billion yuan, with year-on-year growth slowing to 72% from a whopping 474.4% in 2024, as the automotive business saw its first surge in electric vehicles. Huawei works with several car manufacturers for in-car software and driver assistance technology.
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