Beijing has instructed Semiconductor Manufacturing International Corp. (SMIC) to prioritize Huawei in the production of advanced chips, as U.S. export controls become more stringent. This directive is impacting China's AI ecosystem, causing delays for startups and forcing Huawei to rely on clusters of lower-grade chips for training purposes. The U.S. export controls are reportedly restricting China's access to high-end silicon, prompting Nvidia to propose a restricted version of its Blackwell AI accelerator for the Chinese market. Despite these challenges, analysts predict that shipments of Huawei's Ascend processors will surpass 800,000 units by 2025.