Chinese President Xi Jinping is scheduled to arrive in Cairo on Tuesday for a three-day state visit, his first to Egypt since 2016.
The visit comes as Egypt considers a proposal from Chinese tech giant Huawei to build artificial intelligence data-center infrastructure for the government. While the project is formally a tender for computing equipment and services, it figures into the wider technology competition between the United States and China.
According to documents and people familiar with the proposal cited by Bloomberg News, the infrastructure would be used for military, surveillance and other public-sector operations.
Huawei has offered to supply 1,408 Ascend 950 processors for training AI models and 600 Ascend 950 or older 910B processors for running those models across two computing clusters. The company proposed completing the project within 12 months.
If completed, the project could mark the first known export of Huawei’s Ascend AI processors after more than a year of efforts to sell them overseas, Bloomberg reported.
Egypt has not selected a supplier for its AI project, and it remains unclear whether a formal American counterproposal has been submitted.
What Is an AI Data Center?
Mohamed Azzam, a board member of the International Association for Management of Technology, told MBN that traditional data centers mainly store information and run routine applications, including databases, accounting programs and online services.
An AI data center relies on specialized processors that can rapidly analyze large amounts of unstructured data, such as video, images and text. It can also train AI models to identify patterns and produce predictions or responses.
Azzam said the computing capacity could support applications in healthcare, education, agriculture, manufacturing, energy, public utilities and smart-city management.
He said the proposed 2,008-processor capacity is smaller than major facilities in the United States and Europe, some of which contain tens of thousands of processors. He described it as an initial step that could support medium-sized government and business applications.
Nvidia processors currently provide greater computing power and better-established software tools, Azzam said. Huawei’s processors, however, offer a less expensive alternative that may be easier to obtain as U.S. restrictions limit access to some advanced American technology.
Washington’s Response
After learning of Huawei’s proposal, the U.S. State Department contacted Nvidia, AMD and Microsoft about preparing an American alternative, according to Bloomberg.
Bloomberg reported that U.S. technology diplomacy and American AI companies had previously focused more heavily on Saudi Arabia and the United Arab Emirates. Huawei’s proposal has now brought Egypt into Washington’s discussions over the overseas expansion of Chinese AI infrastructure.
Why Egypt?
The competition surrounding the project extends beyond Egypt’s domestic demand for computing capacity.
With a population exceeding 100 million, Egypt has one of Africa’s largest markets and a large pool of engineers and technology graduates. Its location connects Africa and the Middle East with Europe and Asia.
International submarine cables pass through Egyptian territory and waters, making the country an important transit point for global telecommunications.
Azzam said Egypt’s combination of market size, local skills and geographical location could allow the center to serve more than government agencies. If universities, engineers and startups gain access to its computing capacity, it could support applications for Arab and African markets where AI infrastructure remains limited.
The proposal also builds on several years of expanding technological cooperation between Egypt and China.
Huawei launched a cloud region in Cairo in 2024 and announced plans to invest $300 million in Egypt over five years.
In September 2024, the two countries announced five technology agreements. The plans included worker training, expanding Huawei’s local operations, research in chip design, an open-source Arabic language model, and a technology investment fund targeting as much as $300 million.
Surveillance and Data Security
Documents reviewed by Bloomberg showed that Huawei’s proposal also includes technology from iFlytek for identifying people and vehicles using national databases, as well as surveillance systems covering urban areas.
Cybersecurity consultant Mohamed Magdy told MBN that storing servers inside Egypt represents only one part of data sovereignty. Their physical location, he said, doesn’t guarantee local control of the software, encryption keys and system updates.
Access to those elements would be required for Egypt to truly exert national control over the systems, Azzam said. Those safeguards would be particularly important, he added, if the infrastructure is connected to government agencies, military systems, population records or citizens’ financial and health information.
Long-Term Dependence
Relying on one company for processors, software and cloud services could create a long-term dependency, Azzam said. Moving to another supplier later could require major investment and the rebuilding of some systems, although he said the same risk could arise with Western providers.
Egypt could reduce that risk by training local engineers, involving Egyptian companies in operation and maintenance, and enabling universities and startups to develop and train AI models, Azzam said.
Without genuine knowledge transfer, he added, the project could increase dependence on foreign technology instead of building domestic capacity.
Huawei and iFlytek have been on the U.S. Commerce Department’s Entity List since 2019, although for different stated reasons. In 2025, the department issued guidance warning that using some Huawei Ascend processors could violate U.S. export controls under certain circumstances.
Azzam said tighter American restrictions could affect future deliveries of chips or software updates, including after the center begins operating, exposing the project to changes in relations between Washington and Beijing.
He also argued that U.S. restrictions could encourage China and other countries to develop alternative technologies more quickly and lead developing countries to purchase available non-American systems, even when their performance lags behind leading U.S. products.
Egypt has not disclosed the value of Huawei’s offer, whether an American counterproposal has been submitted, or when it expects to make a final decision.
