“You can’t count up innovations that didn’t occur, so we won’t be able to know for a while what the consequences are for Huawei of disengagement from the United States,” said Scott Kennedy, a senior advisor at the Center for Strategic and International Studies. “It’s like oxygen, you’re never really sure how significant it is until you don’t have it.”
For its part, Huawei has insisted it will be fine if it’s forced to leave the United States, but that’s not the route it wants to take.
“Huawei wants to meet with US government officials to work toward a solution, but it’s been challenging to find people that will speak with us,” the company said in a statement to CNN Business.
US research and development operations
But it also created a problem for Futurewei. It meant US Futurewei locations could no longer transfer intellectual property or trade secrets to Huawei’s Chinese headquarters or other blacklisted affiliates around the world, the company said. Now, research and development done at Futurewei can’t actually be implemented into new Huawei products.
The future of Futurewei
Remaining Futurewei employees will focus on completing projects that were already underway prior to the restrictions, said Tim Danks, Huawei’s president of partnerships and risk management. For now, the intellectual property for those projects will remain in the United States as the company hopes for a compromise with the White House.
But the likelihood of such a compromise happening anytime soon looks slim, Kennedy said.
“Perhaps they’re hoping for a change of administrations, a change of priorities,” Kennedy said. “But I think there is a consensus that Huawei is a problem … and that concern is going to outlive Trump.”
That could mean Huawei’s continued investments in US research and development end up going nowhere. Depending what those projects are, that could be a real loss for the company.
Danks didn’t specify the nature of the ongoing projects. But in the past, Futurewei workers have developed technologies related to core areas of Huawei’s business, such as a method for machine learning on wireless networks and one for encrypted data transfers on 5G networks, according to filings with the US Patent Office.
And Danks said it’s unclear whether Huawei will invest in new US research projects going forward. Huawei invested $500 million in Futurewei in 2018 and had planned to invest $600 million in 2019 before it was placed on the blacklist.
“This makes it difficult to do that research and development that will go into future products,” Danks said.
Additional challenges for R&D
Adding to that difficulty: Many American research universities heeded US government warnings and halted partnerships with Huawei in recent months.
Stanford said in a statement that it placed a moratorium on partnerships with or gifts from Huawei “out of an abundance of caution” and “are aware of nothing inappropriate arising from past support that Huawei has provided to Stanford.” Huawei had been a member of two research programs at the university, one focused on artificial intelligence and another on solving complex engineering challenges.
The opportunity to form partnerships such as these are part of the reason foreign companies create US research and development outposts.
“We have a huge, dynamic community of researchers and funders and universities and opportunities to test drive different technologies,” Kennedy said. “That’s why the US is one of the world’s leading innovators.”
Foreign companies investing in development also has residual benefits for the United States, experts say.
“If we have the best talent in the United States and the most innovative companies, that keeps us on the forefront of tech development so we know where things are going, it has a multitude of benefits,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Development.
Huawei, however, says hurdles in the United States aren’t slowing its development efforts elsewhere. Danks said the company still has research partnerships with more than 300 universities globally and that Huawei has begun research on 6G — the next generation of wireless network technology — in Canada, in partnership with several institutions.
“As a global leader in telecom, we have to be looking at the future regardless of the current political climate,” Danks said.