Here’s what’s on our plate today:

• 🛰️ Huawei — how the telecom titan became ground zero in the AI Cold War.

• 🗳️ Tighten, loosen, or scrap U.S. chip-export rules? Cast your vote.

• ⚡ Tesla sales slip, Gemini gets “Gems,” and AI layoff forecasts heat up.

• 💡 Decode “cluster” specs to spot real AI horsepower before you buy.

Let’s dive in. No floaties needed…

The Laboratory

Why is Huawei at the heart of the U.S.-China AI Cold War?

The AI race, seen as the next major frontier in securing global tech dominance, is intensifying. On one hand, the U.S. is looking to maintain its dominance through OpenAI, Microsoft, Google, and Meta, while China is relying on building and supporting its domestic companies. Over the past few years, Chinese companies have leapfrogged into the limelight for their innovation and their ability to catch up, if not compete, with their U.S. counterparts. More recently, Huawei’s push into AI chipmaking (e.g., the Ascend 910C and 910B chips) has caught Washington’s attention. And, the Western powers are working to ensure they do not lose their technological superiority. Amid all this, one Chinese company has been operating in the eye of the storm and continuing to make global headlines, not always for the right reasons.

So, what puts Huawei at the forefront of the U.S. continued efforts to curb China’s technological advance, and what role does the company play in China's push for technological self-reliance? Let us take a look.

From humble beginnings to global tech giant

Before we try to unpack the role Huawei plays in the U.S.-China tech war, it is important to understand the origins of the company and how it managed to become the poster child for China’s technological endeavours.

Huawei was founded by Ren Zhengfei, a former People’s Liberation Army engineer, in Shenzhen with limited capital in 1987. By the 1990s, Huawei had moved on to develop its telecommunication equipment and started participating in the international telecoms expo. And by the early 2000s, after learning from Western firms like IBM, Huawei began expanding overseas, landing its first international contracts in Russia, France, and Africa, showing it could compete on cost and quality.

The company soon rose to be a global powerhouse, becoming the world’s largest network equipment vendor and the world’s second‑largest smartphone maker. At the core of its success lay its focus on aggressive research and development. By 2018, it was spending at least $18 billion annually on R&D, becoming one of the world’s top R&D spenders.

The aggressive growth and the founder’s close ties with the Chinese government, China named Ren one of the country’s 100 “outstanding private entrepreneurs” who “firmly support the leadership of the Communist Party of China,” did not sit well with the U.S. government.

In 2018–19, Huawei faced a dramatic shift. The U.S. arrested the CFO, and daughter of the founder, Meng Wanzhou, in Canada, citing sanctions violations. Around the same time, Huawei was placed on the U.S. Entity List, barring access to U.S. chips and software, catalyzing a 30% revenue drop in 2021.

Pivoting to AI, Huawei’s strategic response

Cut off from U.S. tech, Huawei pivoted aggressively, stockpiling chips, developing domestic alternatives like the Ascend AI chips, launching homegrown software such as HarmonyOS, and exiting pressured units such as the Honor smartphone brand.

By 2023, Huawei had returned to growth, diversifying into new sectors like cloud computing, smart cars, and industrial tech, boosted by Chinese state subsidies.

In 2024, reports emerged that the company was planning to mass-produce advanced artificial intelligence chips, even as it struggled to produce enough chips to meet demand. The Ascend 910C was to be produced by Chinese contract chipmaker Semiconductor Manufacturing International Corp (SMIC) on its N+2 process, despite the lack of advanced lithography equipment.

Although Huawei’s chips are seen as at least a generation behind their U.S. peers, the firm has found ways to enhance performance through methods such as cluster computing. A method that links chips in a cluster that companies can use to train AI models, which has been described by analysts as able to outperform Nvidia's GB200 NVL72 system on some metrics.

Currently, the company’s AI chips compete in China with offerings from Nvidia.

Accusations of intellectual property theft and sanction evasion

Even as Huawei continues to shift its focus from telecommunications to artificial intelligence, the company continues to face significant hurdles due to the U.S. sanctions.

Recently, a U.S. judge rejected Huawei’s bid to dismiss most of a federal indictment accusing the Chinese telecommunications company of trying to steal technology secrets from rivals and misleading banks about its work in Iran.

Allegations against the company include orchestrating a racketeering conspiracy to steal trade secrets from at least six U.S. firms, including source code related to routers, cellular antennas, robotics, and telecom systems. The company is alleged to have rewarded employees for bringing stolen intellectual property into the company and accessing confidential material under pretenses.

The U.S. has also accused Huawei of using a Hong Kong-based shell company called Skycom to violate U.S. sanctions by selling equipment to Iran.

Another serious allegation is that Huawei installed surveillance systems in Iran in 2009, intended to monitor and identify dissidents during protests. U.S. intelligence and national security officials argue that Huawei’s global infrastructure could be leveraged for espionage and compromise critical networks. At the core of the fears lay China’s National Intelligence Law of 2017, which seems to require all companies like Huawei to open their networks to Chinese intelligence.

Huawei’s role in China’s vision for tech self-sufficiency

China’s vision of technological self-reliance is epitomized by Huawei’s expanding presence across critical sectors like AI, semiconductors, 5G, and infrastructure.

Rooted in Beijing’s long-term strategy, Huawei has become a linchpin in the nation’s ambition to reduce dependency on Western technology, and U.S. export controls on advanced chips have unintentionally accelerated this shift, prompting Huawei to thrive domestically by leveraging local demand and government support.

The company has also been working to build a domestic chip supply chain by lending engineering and expertise, and financial support to smaller companies in strategic areas. Kendra Schaefer, a partner at Beijing-based consultancy Trivium China, says “Huawei is now the centerpoint,” and export controls have united the state and industry in unprecedented ways.

And while Huawei refutes claims of receiving government support, reports suggest that state support for the company has reached unprecedented levels. According to a report from Bloomberg, a group of enterprises, backed by the Shenzhen city government investment fund, is helping the company realize its ambition. The group includes optical specialists, chip equipment developers, and chemical manufacturers. Huawei is also reported to have received help from the $30 billion state-sponsored endeavor that aims to help it build chip fabrication facilities.

How is Huawei navigating global tech decoupling?

Huawei’s evolution from a telecom newcomer to a central figure in China’s AI ambitions highlights a narrative far broader than the growth of a single company.

It stands at the nexus of geopolitical rivalry, technological self-reliance, and a global AI arms race. While U.S. sanctions and criminal indictments aim to curb its influence, Huawei has adapted by pivoting towards domestic innovation and playing a central role in China’s pursuit of tech independence. As it doubles down on AI chips and software ecosystems, its future may not lie in competing head-to-head with U.S. giants globally, but in leading a parallel Chinese AI ecosystem that powers much of the Global South. Ultimately, Huawei’s journey reflects the broader decoupling in global tech, one where resilience, state support, and strategic adaptability may determine who shapes the future of AI.

TL;DR

“Huawei’s in the chat — and Washington’s typing…”

• From startup to superpower: ex-PLA engineer Ren Zhengfei turned a scrappy Shenzhen reseller into the world’s top network-gear giant.

• Sanctions can’t stop the pivot: blacklisted in 2019, Huawei doubled down on home-grown Ascend AI chips, HarmonyOS, cloud & EV tech.

• U.S. fears & lawsuits mount: Washington says the firm steals IP, dodges Iran sanctions, and could funnel data to Beijing under China’s 2017 intel law.

• Beijing’s silicon shield: massive state funds, university talent pipelines, and local demand make Huawei the linchpin of China’s drive for AI self-reliance.

Headlines of The Week

• Tesla deliveries skid 12% in Q2, fanning fears that even steep price cuts can’t revive sagging EV demand.

• Google rolls out “Gems” for Workspace, letting Gemini whip up Docs drafts, Gmail replies, and more with custom prompts.

• AI job-impact forecasts become corporate sport as US giants race to predict—and profit from—who (or what) gets automated next.

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