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Huawei cloud revenue declines as Chinese AI trails US rivals
Tencent reported increased revenue from cloud services both domestically and internationally
Despite efforts by Huawei to craft its own AI chip, it hasn't matched the rapid revenue increases its rivals have seen, as Chinese firms work to close the AI divide with the United States.
Revenue from cloud services to external clients decreased by 3.5% in 2025 to CNY 32.16 billion ($4.6 billion), Huawei stated. The firm ranks as the second-largest cloud provider on the Chinese mainland.
Cloud earnings, which include internal clients, increased by 4.8% to 72.8 billion yuan, although the core ICT infrastructure unit saw revenue growth slow to 2.6%, a drop from 4.9% in 2024.
This is where Huawei's self-developed Ascend AI chip solutions fall, intended to compete with Nvidia. For 2025, Huawei's total ICT income hit 375.01 billion yuan.
Restrictions from the US limit Chinese firms' access to Nvidia's top chips, while Beijing has pushed for local tech independence.
Huawei's cloud income decline to external sources coincides with ByteDance's rapid growth in China’s AI cloud sector recently, albeit from a modest base.
Reports suggest that the TikTok owner is securing access to top-level Nvidia chips via a potential data center in Malaysia.
AI tools developed in the US are generally viewed as the world's best, though certain Chinese models excel in video creation. Access to all US AI models is not officially available in the Chinese mainland.
Huawei's limited cloud growth comes as the industry expands swiftly worldwide, contrasted with slower economic development in China.
Globally, expenditure on cloud infrastructure rose by 29% in the fourth quarter, marking the sixth consecutive quarter of over 20% market growth, based on Omdia's reports. Their prediction for 2026's cloud growth stands at 27%.
Earlier this month, Alibaba—the dominant cloud computing firm by market share in China—announced a 36% revenue bump to CNY 43.28 billion in 2025.
Meanwhile, Tencent reported increased revenue from cloud services both domestically and internationally, which contributed to a 22% rise in business revenue in 2025.
