Chinese President Xi Jinping’s three-day visit to Egypt, coinciding with the 70th anniversary of diplomatic relations between the two nations, marked his first trip to the Middle East in four years and the first to Egypt in a decade. The trip caused debate among geopolitical observers over Egypt’s diplomatic balancing act between China, one of its largest economic partners, and the United States, a major defence and strategic partner. But Egypt also finds itself in another tightrope walk between the two superpowers: it is emerging as a potential battleground in the US-China artificial intelligence race.
Xi’s visit came at a time when Chinese tech giant Huawei has submitted a tender to build Egypt’s AI data centres. The US, meanwhile, is reportedly pulling together an offer to counter Huawei’s bid. Whoever wins the contract to build the data centres will also gain an opportunity to strengthen their political and economic ties with Egypt.
Egypt, which receives roughly $1.3bn a year in US military aid and remains a major American defence partner, has been steadily deepening its economic and military ties with China in recent years. So what does all of this mean for Egypt’s relations with the US and China, and who stands to benefit from AI data centres in Egypt? Huawei has offered to supply “1,408 Ascend 950 processors for AI model training, plus 600 Ascend 950 or older 910B chips” to build two computing clusters.
The company proposed a 12-month build timeline, and if the project goes through, the deal would mark the first known export of Huawei’s Ascend AI processors, according to documents reviewed by Bloomberg. The infrastructure that would house the AI chips would be used for military, surveillance and other public-sector operations, the news agency reported. According to anonymous sources quoted by Bloomberg, the US State Department is working on a counteroffer to Huawei’s AI chip bid through companies including Nvidia, Advanced Micro Devices Inc, and Microsoft Corp.
Currently, China and the United States are leading globally when it comes to AI development and investment. The gap between the world’s two biggest economies is narrowing fast, though. On spending alone, the US still dominates, with American firms pouring $285.9bn into private AI investment in 2025, against China’s $12.4bn, according to the 2026 AI Index Report by Stanford University.
Al Jazeera contacted Huawei for comment but received no response. He also added that the “Chinese often likely have the advantage of being cheaper compared to American companies.” Environmentally, Egypt sits at a disadvantage when it comes to water scarcity and air pollution. The country’s per capita water share has fallen below 500 cubic metres a year, under half the UN’s water poverty threshold, according to Egyptian government data.
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