What Huawei’s CEO Thinks of America
“The soft power of the United States in science and education is something we cannot achieve in a few decades.”
Ren Zhengfei, the CEO of Huawei, gave the following speech at a private event in association with Shanghai Jiao Tong University on February 24, 2023. A redacted transcript has been made public, and we’ve translated excerpts below. It’s a remarkably frank look at Huawei’s experience throughout the US-China tech war. Ren discusses:
Why he still believes in American innovation
What R&D investments Huawei has made to survive the sanctions
Why the AI boom is creating more demand for Huawei’s products
And why he thinks Socialism with Chinese Characteristics will lead to the rise of Chinese compute.
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Sanctions, R&D, and the American Dream
First of all, I would like to thank everyone for their contributions to Huawei. We are still in a difficult period, but we have not stopped moving forward. In 2022, our R&D budget was $23.8 billion, and as our profits increase in the coming years, we will continue to invest more in cutting-edge exploration. Our collaboration with universities is intended to explore the future of humanity within certain technological boundaries; the 2012 Lab, founded upon fundamental and applied theories, explores realistic possibilities and is not bound by performance evaluation; and our product lines are responsible for the commercial success of our products. These are the three main stages, and as our economic strength grows, we will continue to expand our external collaborations like a “horn mouth.”
When I was young, I admired the West because its technology was so advanced. At that time, books were very precious, and it was difficult to find a good book. I wanted to read but couldn’t buy books. After founding Huawei, I was also pro-Western. At that time, we put forward a slogan, “To use the best components and tools in the world to make the best products in the world,” and we achieved it. Then suddenly we were sanctioned, and others could not provide us with components, tools … we were dumbfounded. Many of the best parts in the world come from the United States, and in fact, I am pro-American.
When the United States hit us with sanctions, [Huawei deputy chairman] Xu Zhijun said to me at an office meeting, “The United States does not understand that with this blow, they have turned the most pro-American person into the most anti-American person.”
Of course, even now I am not anti-American. If we want to be the most advanced, we must learn from all those who are already advanced. The soft power of the United States in science and education is something we cannot achieve in a few decades. American politicians come and go, but the United States’ innovative soil has lasted for hundreds of years and will not degrade because of them.
Fortunately, we spent nearly twenty years in the past preparing in the realm of basic theory, investing hundreds of billions to cultivate a group of scientists who study basic theory and possess expertise in technical details. They have been climbing “the Himalayas of science.” When others put pressure on us, we asked these scientists to come down to the foot of the mountain to herd sheep, “farm,” [redacted] and join the battle of “slaughtering pigs” with a “scalpel.” Within three years, we completed the development of 13,000+ alternative components and 4,000+ circuit board replacement developments. It wasn’t until now that our circuit boards have stabilized because we have domestic component supplies. This April, our MetaERP — which completely uses our own operating system, database, compiler, and language — will be launched. [redacted] We have created our own management system, MetaERP software. MetaERP has been tested in various departments of our company worldwide, and it has passed the annual accounting test of the company’s general ledger. Our company’s accounts are complex in the industry, so we’ve successfully proved that MetaERP is ready for widespread adoption. Many design tools have also been made available on Huawei Cloud for public use, gradually overcoming awkward supply cuts.
In the past, we collaborated extensively with universities in Western countries, and now we have started to strengthen our cooperation with domestic universities, which is related to the changes in my personal guiding ideology. As we move toward the cutting edge, we will gradually strengthen this cooperation within our country.
On AI Applications
Artificial intelligence software platform companies’ direct contributions to human society may be less than 2% of their overall impact, while 98% will come in the form of enabling industrial and agricultural contexts. The popularization of AI services requires 5G connectivity. Germany supports Huawei’s 5G so strongly because it wants to promote the advancement of AI in Germany’s industry. Many factories in Germany have automated production; in China, Xiangtan Steel Plant has automated processes from steelmaking to rolling, with no one working in front of the furnace; the Port of Tianjin has also achieved unmanned loading and unloading of cargo. By inputting a code, containers are automatically transported from the ship and then taken away by trucks; after adopting 5G and AI in Shanxi coal mines, the workforce has been reduced by 60-70%, with most people working in control rooms on the surface wearing suits. [redacted] These are all examples of large-scale use, and in these processes, the ultimate contribution to humanity is significant.
Everyone should pay attention to applications, especially in industrial and agricultural contexts. Sometimes the application of models has more prospects than the models themselves. [Ed: See our upcoming interview with Jeff Ding later this week on the podcast. Ren also thinks the future belongs to those who can diffuse AI!] However, our company will create only AI’s underlying computing platforms, and application platforms are not among our options. Since we simply can’t do other areas, we have to focus on this aspect and strive to establish a computing platform that meets social needs. Xu Zhijun’s vision, as told to me, is that the underlying platform will be open, and within the 2% platform contribution, we need only to occupy a small portion. What are the opportunities ChatGPT brings to us? It will expand computing and pipeline traffic, which will create market demand for our products.
The Great Firewall, Research, and What Happens When You Die
The iteration speed of computers is much faster than that of communication — not once every two or three years, but every two or three months. You need to feel the rapid pace of change in the world. If you cannot access foreign websites, you can get a sense of it on the Huawei Chaspark [Huawei’s former internal discussion forum, now open to the public] technology website. Our employees read papers from outside [of China], and they post useful content they find; if there are copyright issues, they will take down the index, and you can find a way to read it yourself. The speed of world change will only get faster, and the future world will be terrifying. Yuval Harari mentioned at the Davos Forum that people will be slaves to machines in the future. When I was asked at the conference, I couldn’t answer well because I am quite ignorant of social issues. I said that when people die, their souls are gone, and I was talking about simulating souls.
In reality, digital souls will not disappear; they have inheritability, and AI is subverting our past understanding. Therefore, the changes in human society are unimaginable, and you need to perceive these changes by reading more academic literature.
Next up: why Ren Zhengfei thinks that China’s socialist governance structure gives it the edge when it comes to compute, and why he’s proud of Huawei’s work in St. Petersburg…