Huawei is the Pivot of the Cold Tech Wars

The patent wars show Huawei is well positioned to weather the storm.

Michael K. Spencer

Jun 27

A new wave of American news sources have stated recently that Huawei employees have worked on several projects for the Chinese Government.

That Huawei employees reportedly worked on Chinese military research projects is hardly surprising. Google and BigTech in America have worked on the same thing for the U.S. Government.

The U.S. should not accept a trade deal from China that excludes regulations on Chinese tech giant Huawei, according to some analysts, but Huawei is impossible for the U.S. to regulate. It has deep 5G global penetration with cheaper prices than its competitors.

Even with sanctions from the U.S., Huawei is destined to overtake Samsung in smart phone sales sometime in the 2020s.

Now Huawei says it’s talking with Verizon and other U.S. firms about royalties for using its patented tech. It’s a never ending tit for tat. American companies are afraid of what this could escalate into, where it impacts their bottom lines too.

Huawei is essentially a dirty bomb inside industrial democracies, according to some American analysts. Meanwhile Huawei is a pivotal company for China’s stake in the future of global technology architecture. Huawei is the largest global provider of telecommunications equipment. It employs nearly 200k people, so it’s roughly the size of Amazon. Yet its impact on the world is much greater.

Several Huawei Technologies Co. employees have collaborated on research projects with Chinese armed forces personnel, indicating closer ties to the country’s military than previously acknowledged by the smartphone and networking powerhouse. If Huawei hasn’t been totally transparent, neither have BigTech American companies on their collaboration with U.S. governments and military projects. It works both ways.

In a Tech Cold War scenario don’t we just have to assume that technology companies work with their own governments? That they must collude, collaborate and share data as well as fast-track R&D that could be in their national best interests? America’s media is practically state-owned at this point. To assume that tenets of democracy exist in a technological capitalism is a grey area now.

Huawei, for all of its controversy, is kind of an R&D machine and patent king. By the end of 2018, it had been granted 87,805 patents globally. Of those, 11,152 are registered in the U.S. Huawei is maybe only second to Amazon in patent polymath success. How do you try to blacklist such a machine? And if you do it, why do you wait until it’s this powerful?

Last month, the U.S. declared a national emergency over threats against American technology, leading the Trump administration to effectively blacklist Huawei from conducting business with U.S. companies. The backlash however has shown that even national regulation of a foreign company deemed “dangerous” is difficult in today’s inter-connected business world.

Huawei said it has received $1.4 billion in licensing revenue since 2015. The Verizon deal reportedly could be $1 billion alone. In short, a lot of American tech is based on Hauwei intellectual property and R&D. China already owns a lot of the global 5G infrastructure, even as American companies pretend they are able to compete with it on a level playing field.

Chip manufacturers in the U.S. are all feeling the impact of the Trump administration’s Huawei ban, but some companies are weathering the storm better than others, such as Micro Technologies as of late June, 2019. While China is feeling the short-term pain of the trade war, if it goes on for years, the U.S. could end up as the real loser.

Huawei has been accused of being linked to China’s ruling Communist Party, something the corporation has repeatedly denied. U.S. officials are concerned the equipment could help China access Americans’ user data. While America has been aggressive with trade and propaganda tactics in 2019, how drastically the world is set to change even in the next 10 years in favor of China’s economy and technology sector. We may be witnessing the last hurrah of American dominance, and China knows it.

Seemingly aware of the potential for Huawei to use patents against U.S. companies, Sen. Marco Rubio proposed legislation that would block Huawei from fighting patent disputes in American courts, according to Reuters. When America companies start calling leading Chinese companies “patent trolls”, you know it’s a red flag of a country unable to innovate or keep up.

Huawei on so many levels is like a hydra you don’t want to mess with. Trump of course has no concept of the long-term impact of getting on China’s ugly side. But the generations and American leaders to follow will. Huawei isn’t just a hot potato, it’s a fascinating sociological instance of how technology firms become more important than governments and policies and the total inability of the latter to regulate the former.

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