Kathmandu— Egypt faces a pivotal strategic choice as China and the US intensify competition over the development of AI data centres in the country, with Huawei submitting a tender for the project and the US reportedly preparing a counteroffer through major tech firms, amid Egypt's dual reliance on both nations for military aid and economic partnerships.

Huawei's AI Infrastructure Bid

Huawei has proposed supplying 1,408 Ascend 950 processors for AI model training, along with 600 additional chips, to construct two computing clusters in Egypt, marking the first known export of its Ascend AI processors. The company outlined a 12-month build timeline for the project, which would house infrastructure for military, surveillance, and public-sector operations, according to Bloomberg documents reviewed by the outlet.

The US State Department is reportedly coordinating a counteroffer involving Nvidia, Advanced Micro Devices, and Microsoft to challenge Huawei's bid, as both nations vie for influence in Egypt's emerging AI sector. This competition reflects the broader global struggle between the US and China, which together dominate AI development and investment, with American firms investing $285.9 billion in private AI in 2025 compared to China's $12.4 billion, per the 2026 AI Index Report.

Geopolitical Implications for Egypt

Egypt's diplomatic balancing act between China and the US has intensified as the country emerges as a potential battleground in the AI race. The nation receives approximately $1.3 billion annually in US military aid while deepening economic and military ties with China, which has become its largest trading partner in non-petroleum goods, with bilateral trade reaching nearly $20.7 billion by 2025.

Mohamed Ramadan, a human rights advocate from the Egyptian Initiative for Personal Rights, emphasized that the competition over data centres represents a significant geopolitical struggle, stating, "The question of data centres is a very significant geopolitical one. This competition primarily revolves around data and the ability of both nations to integrate data from different regions worldwide, which is essentially a battle over the future in some way."

Ramadan also noted that Huawei's long-standing presence in Egypt, including numerous telecom agreements, may give it an edge over US companies, particularly due to potentially lower costs.

Economic and Environmental Concerns

Egypt's water scarcity and air pollution present significant challenges for hosting AI data centres, which require substantial cooling and energy resources. The country's per capita water share has fallen below 500 cubic metres annually, well under the UN's water poverty threshold, while Cairo ranks among the world's most polluted cities.

Egyptian political analyst Maged Mandour warned that the government would likely prioritize the AI project's resource needs over broader public demands, stating, "The government will likely supply the project the water that it requires, and the energy that it needs while depriving other parts of the country of the needed resources."

Mandour further argued that the deal would primarily function as an export of AI technologies rather than a transformative economic initiative, with limited long-term benefits for Egypt's economy or job market.

With the Suez Canal's strategic importance growing amid regional conflicts, Egypt's decision on the AI data centre contract could significantly influence its geopolitical alignment and economic trajectory in the coming years.

(With inputs from Al Jazeera)

More from the source

Originally published on abcnews.com.np.