Huawei's cloud computing revenue dropped in 2025 as Chinese AI lagged U.S. rivals

Huawei's ambitions in artificial intelligence are struggling to keep pace with its competitors, as the tech giant reported a decline in its cloud computing revenue for 2025. Specifically, the company's revenue from external cloud customers fell by 3.5%, totaling 32.16 billion yuan (approximately $4.6 billion). Despite being the second-largest cloud service provider in mainland China, Huawei's growth has not mirrored the double-digit increases seen by its rivals in the industry. In total, Huawei's overall cloud revenue, which includes internal customers, experienced a moderate rise of 4.8%, reaching 72.8 billion yuan. However, the growth in its key ICT infrastructure segment has notably slowed, with revenue growth dropping to 2.6% from 4.9% the previous year. This segment is crucial for Huawei as it encompasses the company's self-developed Ascend AI chip solutions, which are intended to compete with Nvidia's offerings. The backdrop to Huawei's challenges includes the U.S. restrictions on advanced Nvidia chips for Chinese firms and a push from Beijing for greater tech self-sufficiency. Furthermore, while Huawei's cloud revenue from external clients declined, competitors like ByteDance have rapidly expanded their AI cloud services, backed by partnerships that enhance their access to high-end technology. Despite the tough landscape, Huawei's total ICT revenue for 2025 stood at 375.01 billion yuan. Global trends indicate a significant demand for cloud infrastructure, with spending rising by 29% in the last quarter, showcasing a broader industry growth despite Huawei's setbacks. Meanwhile, Alibaba, the leading cloud provider in mainland China, reported a substantial 36% revenue increase, highlighting the competitive pressures facing Huawei. In addition to cloud challenges, Huawei's overall business growth was modest, increasing by just 1.6% to 344.47 billion yuan. The smartphone segment, however, maintained a leading position in China, although competition intensified with the release of the iPhone 17, which began to erode Huawei's market share. For 2025, Huawei reported total revenues of 880.9 billion yuan, reflecting a 2% increase, along with a net profit of 68 billion yuan, marking an 8% rise year-on-year. The company invested a record 192.3 billion yuan in research and development, representing 21.8% of its revenue. "In 2025, Huawei's overall performance remained steady," stated Sabrina Meng, Huawei's rotating chairwoman, expressing appreciation for the support from customers and partners. The intelligent automotive solutions division also saw revenue of 45.02 billion yuan, although its year-on-year growth decelerated sharply from 474.4% in 2024 to 72% in 2025, as it capitalizes on the growing electric vehicle market.