Much of the world already runs on Nvidia chips and eco-system including China(though the sanctions are impeding Nvidia from cornering this market completely) since Nvidia is still the world leader in AI chips including her ecosystem/software. Huawei is the new contender trying to break into the market not ndvidia who is already long established.. So Huawei is the one who has more to prove, by outlawing Huawei chips worldwide, the US is effectively closing up even the little chance Huawei had of expanding outside China. So it's a major disadvantage for China in this AI race. Since China can't develop in a vacuum isolated from the world. The world can't be running on US system while China is all on her own, else the company risk finding herself in a situation like Baidu with no competitive presence globally but just focus on local market. That will be considered a lost in my opinion.
Don't think that will happen. China has a policy of non interference in country's internal affairs.
Except China already explicitly stated anyone who complies with US restrictions will face Chinese legal response, aka sanctions.
You're assuming China only benefit from exporting Ascend when China actually benefit from just preventing or reducing US sales of Nvidia. As you said Nvidia is currently mainstream, so if US stuck to competing on ecosystem and performance they could have outsold Huawei without anyone raising an eyebrow.
But by turning this into a political problem, and with China threatening sanctions on countries who side with the US, now the choice to buy Nvidia becomes a political one, one that potentially carries consequences if Huawei entered Ascend into the bid. China has nothing to lose, while US has everything to lose, it doesn't matter to China if in the end someone doesn't buy neither, but it matters to the US if someone didn't buy theirs.
Domestically China hasn't completely replaced Nvidia yet so export is almost a moot point, from an access perspective it suites China just as well if someone uses Deepseek hosted in China. Exporting GPU is an American need, not Chinese, China's need is just to throw wrenches into American sales.
Strategically the side with a better product benifits from zero politics while the side without a better product benifits from politics. By injecting politics into a competition that US had an advantage on merit, they're actively helping China equaliz the playing field, which China with the announcement is obviously taking full advantage
