As the China-US AI race reaches Cairo, Egypt faces a strategic decision

Chinese President Xi Jinping’s three-day sojourn to Egypt, coinciding with the 70th day of diplomatic relations betwixt the 2 nations, marked his archetypal travel to the Middle East successful 4 years and the archetypal to Egypt successful a decade.

The travel caused statement among geopolitical observers implicit Egypt’s diplomatic balancing enactment betwixt China, 1 of its largest economical partners, and the United States, a large defence and strategical partner.

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But Egypt besides finds itself successful different tightrope locomotion betwixt the 2 superpowers: it is emerging arsenic a imaginable battleground successful the US-China artificial quality race.

Xi’s sojourn came astatine a clip erstwhile Chinese tech elephantine Huawei has submitted a tender to physique Egypt’s AI information centres. The US, meanwhile, is reportedly pulling unneurotic an connection to antagonistic Huawei’s bid. Whoever wins the declaration to physique the information centres volition besides summation an accidental to fortify their governmental and economical ties with Egypt.

Egypt, which receives astir $1.3bn a twelvemonth successful US subject assistance and remains a large American defence partner, has been steadily deepening its economical and subject ties with China successful caller years.

So what does each of this mean for Egypt’s relations with the US and China, and who stands to payment from AI information centres successful Egypt?

Portraits of Egypt’s President Abdel Fattah el-Sisi and China’s President Xi Jinping, on with a connection speechmaking successful Arabic, ‘The Egyptian-Chinese relationship welcomes Egypt’s guest’ connected September 1, 2026 [Amr Abdallah Dalsh/Reuters]

Is China utilizing Egypt to get up successful the AI contention against the US?

Huawei has offered to proviso “1,408 Ascend 950 processors for AI exemplary training, positive 600 Ascend 950 oregon older 910B chips” to physique 2 computing clusters.

The institution projected a 12-month physique timeline, and if the task goes through, the woody would people the archetypal known export of Huawei’s Ascend AI processors, according to documents reviewed by Bloomberg. The infrastructure that would location the AI chips would beryllium utilized for military, surveillance and different public-sector operations, the quality bureau reported.

According to anonymous sources quoted by Bloomberg, the US State Department is moving connected a counteroffer to Huawei’s AI spot bid done companies including Nvidia, Advanced Micro Devices Inc, and Microsoft Corp.

Currently, China and the United States are starring globally erstwhile it comes to AI improvement and investment. The spread betwixt the world’s 2 biggest economies is narrowing fast, though. On spending alone, the US inactive dominates, with American firms pouring $285.9bn into backstage AI concern successful 2025, against China’s $12.4bn, according to the 2026 AI Index Report by Stanford University.

Al Jazeera contacted Huawei for remark but received nary response.

“The US and China are globally competing implicit information centres”, quality rights advocator from the Egyptian Initiative for Personal Rights (EIPR), Mohamed Ramadan, tells Al Jazeera. “The question of information centres is simply a precise important geopolitical one”, helium added.

“This contention chiefly revolves astir information and the quality of some nations to integrate information from antithetic regions worldwide, which is fundamentally a conflict implicit the aboriginal successful immoderate way.”

Ramadan, however, argued that China mightiness person an vantage implicit the US successful Egypt arsenic “Huawei has been successful Egypt for years” having signed galore agreements with the Egyptian authorities for the proviso of telecom equipment. He besides added that the “Chinese often apt person the vantage of being cheaper compared to American companies.”

Who would this AI centre benefit?

Environmentally, Egypt sits astatine a disadvantage erstwhile it comes to h2o scarcity and aerial pollution. The country’s per capita h2o stock has fallen beneath 500 cubic metres a year, nether fractional the UN’s h2o poorness threshold, according to Egyptian authorities data.

Data centres are notoriously h2o and power-hungry due to the fact that precocious processing powerfulness requires important cooling. Egypt’s superior is besides ranked among the world’s astir polluted cities, raising the question of whether an AI information centre could marque the concern much severe.

Racks for information servers, GPUs and CPUs wrong the Nebius AI UK information centre, which necessitate tremendous amounts of h2o for cooling [Toby Melville/Reuters]

Speaking to Al Jazeera, Egyptian governmental expert Maged Mandour said that contempt h2o scarcity being a salient issue, the authorities volition apt proviso the task “the h2o that it requires, and the vigor that it needs portion depriving different parts of the state of the needed resources”.

He added that the woody would beryllium “an export woody of AI technologies” and would not needfully payment the Egyptian economy.

“I deliberation it’s improbable to pb to sustained employment … possibly it would make immoderate jobs, but it’s not thing that would beryllium economically transformative semipermanent successful wide successful a ample state similar Egypt.”

Why did China take Egypt for an AI information centre?

The crushed lies successful wherever Egypt sits connected the map. The state controls the Suez Canal, and it sits astatine the crossroads of Africa, the Middle East, Europe and Asia, making it some a sizeable marketplace for Chinese companies and a imaginable manufacturing and logistics hub for reaching everyone astir it.

Against a backdrop of determination conflict, driven by the six-month US-Israel warfare connected Iran, and the partial closure and regularisation of the captious waterway, the Strait of Hormuz, the Suez Canal’s strategical value has lone grown. It is contiguous an evident prime for an alternate shipping route. Routing done the Suez Canal sidesteps some the Hormuz and Bab al-Mandeb straits, letting cargoes debar immoderate imaginable risks that could beryllium faced there.

The Suez Canal became an evident prime for alternate shipping routes aft the US-Israel warfare connected Iran restricted travel done the Strait of Hormuz [Mahmoud Khaled/AFP]

China is Egypt’s largest trading spouse successful non-petroleum goods, with bilateral commercialized reaching astir $20.7bn by the extremity of 2025, according to the State Information Service (SIS).

Egypt is besides an important economical spouse for China. The North African state imported $10bn of Chinese goods successful the archetypal fractional of this twelvemonth alone, according to Egyptian authorities data, up much than 14 percent from the aforesaid play a twelvemonth earlier.

Chinese concern has surged since Egyptian President Abdel Fattah el-Sisi signed a strategical concern statement successful Beijing successful 2014. Since then, Chinese firms person poured billions into antithetic Egyptian projects ranging from instrumentality ports, greenish hydrogen and factories producing robust pipes, car tyres and satellites.

According to figures cited by China’s Xinhua quality agency, the China-Egypt Suez Economic and Trade Cooperation Zone attracted much than 200 companies and created much than 10,000 nonstop jobs by the extremity of June. That portion is simply a large planetary concern and manufacturing hub located on Egypt’s Red Sea seashore and was established arsenic a associated task betwixt China and Egypt arsenic portion of China’s Belt and Road Initiative.