Huawei aggressively expanding, despite US threats against anyone, anywhere using their chips
This is a transcript, for the video found here:
Bullets:
The US Commerce Department has announced criminal penalties and fines against any person or company across the world who uses Huawei AI chips.
But Huawei is nevertheless expanding across markets outside North America and Western Europe, along with ZTE and Bytedance--two other Chinese firms under heavy US sanctions.
Chinese companies enjoy enormous advantages in cost, along with deep supply chains and experience building end-to-end systems in telecom, cloud services, AI, and data centers.
Report:
Good morning. Huawei is an electronics company in China, and Huawei is a primary target of our semiconductor export bans, the CHIPs War, as it’s called. Western companies are generally banned from selling hardware or other tech and services to Huawei. Last month the US Commerce Department went a step further, and issued new restrictions on anyone buying equipment from Huawei.
The new US export controls govern semiconductor chips used in artificial intelligence. Any person or company, inside or outside the United States, using them without the authorization of the BIS—part of the Commerce Department—could face criminal and administrative penalties, including prison and fines.
It’s difficult to see just how these rules can be enforced in the real world, but these “new restrictions will force users across the world to choose between US and Chinese AI” companies.
That was last month, May. Huawei and ZTE—another Chinese tech company under heavy US sanctions—are planning a big expansion push, especially in Belt and Road countries. Huawei is restricted from selling in North America and Europe, so they’re opening up markets elsewhere. Other countries face challenges in developing AI, and in countries where China already has a strong presence Huawei is being waved on in. Malaysia and Uzbekistan are mentioned here, both of whom have big ambitions in AI software and services.
The global AI market – this is hardware primarily – will be about $223 billion in three years. The US is the biggest market now, but other markets are growing faster. China will grow at 35%, and in aggregate ASEAN, Europe, Middle East and Africa will grow by 21%. That’s misleading, because Malaysia and Uzbekistan, for examples, are starting at almost zero—so are most of countries lumped in to that 21%. So Chinese companies will have that 35% in China just by showing up, and compete head-to-head everywhere else.
Chinese firms have huge advantages in cost, and in supply chain. They also have deep experience setting up base stations and telecom. Huawei has 31% of the global market share for that, and they plus ZTE add up to 40%. When Chinese firms go into new markets, the 5G communications towers and cloud service are built out first, then come the AI and data centers.
That’s the business model they’ve got for Brazil, which is a BRICS country and China has lots of Belt and Road Investments there. Dataprev is a state-owned company in Brazil, and will use Huawei to build their data centers. For Brazil, the most important consideration is economic growth and development, while balancing their relationship with the United States and China.
Brazil wants to become an AI hub powered by renewable energy, China makes all that possible at a lower cost, and Brazil has thus far ignored Washington’s demand that they ban Huawei from building equipment for them.
This is the CEO of another Brazilian company, Edge, who wants to buy Huawei chips to expand into infrastructure and AI—remember, the Commerce Department says that they can put people in jail if they buy Huawei chips. Rodrigo Lobo, and here he is meeting with Huawei, getting interviewed, and wearing a microphone. He does not look worried.
This is Qingdao, Shandong. Be Good.
Resources and links:
SCMP, Huawei and ByteDance plan major investments in tech sectors in Brazil
Nikkei Asia, US issues worldwide restriction on using Huawei AI chips
Nikkei Asia, Huawei's AI servers show tech advancing despite US curbs
Huawei and ZTE take AI to Belt and Road, shrugging off US sanctions
The global AI market is expected to reach $1.81 trillion by 2030
https://www.faistgroup.com/site/assets/files/1709/global-artificial-intelligence-market-size.png
The Implications of Brazil Joining China's Belt and Road Initiative
https://worldview.stratfor.com/article/implications-brazil-joining-chinas-belt-and-road-initiative
Another informative article, Kevin. Thanks
Thanks for the write-up. I am now totally convinced that Make America Great Again actually means falling behind even more.