Huawei's bridgehead embiggening in the EU

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AI/ML
Huawei's bridgehead embiggening in the EU
Analysis: Huawei pitched a message about how it’s advancing an intelligent and green Europe with a bridge to China at its Huawei Connect 2026 event in Florence last week.
That bridge is set to become bigger.
Huawei's focus on AI and sustainability aids the EU in lifting its AI capability vis-a-vis the US and China, and supports its net-zero carbon reduction goals, while also offering an alternative to US suppliers.
There were more than a thousand attendees, and many watched a welcome video pitch from Italian government Minister of Enterprises Adolfo Urso stressing Italy’s desire to play a leading role in the digital transition. Various enterprise-class customers also pitched their use of Huawei gear. We are looking here at a well-established Chinese supplier of integrated compute, networking, storage, and public cloud IT services with solid green credentials, meaning less electricity usage.
What struck this observer was how comfortably Huawei occupied its place in the EU’s IT supply ecosystem.
There is a growing antipathy between the EU and what it considers the boorish and ill-informed US view of its activities. Data compiled by the Pew Research Center and Eurobarometer shows 75 to 80 percent of citizens across major Western European nations express a distinct lack of confidence in the current US administration's handling of world affairs.
On the US side here is venture capitalist Marc Andreessen of a16z: “Europe seems, I just take them at their word, determined to be left behind. They seem enthusiastic about being left behind. They seem to really badly want that," He continued, "I think they would be very happy if AI didn't happen inside the EU. I think they'd be very happy if social media didn't exist. I think they'd be quite happy to shut up the internet.”
Of course, the EU can’t do those things and falls back on regulatory control attempts instead, while disliking and disagreeing with Andreessen's views. He might say emperors never like being told they have no clothes.
The EU’s ties to the USA are weakening while its links with China are growing stronger, but these bring threats in their wake.
Jamie Dimon, Chairman & CEO, JPMorganChase & Co, thinks China’s manufacturing strength could overwhelm the EU’s industrial base. At the Economic Club of Chicago, he said this month: “The Chinese are tough. They can do what they want. I don't think they have to be a natural enemy of ours. But the other thing about them is if you don't have a common trade barriers of sorts that are fair, it's going to be hard to stop them.
“And if you go to Germany today, they don't have a proper defense industrial base, but their real industrial base was extraordinary cars, machine tools, all this equipment. I'm sure if you're in business, you have a lot of them in your plants. That's being attacked today by the Chinese and their stuff is good. And they're going to lose. And you can see it right in front of you, but it's going to take a while to play out. And we have obviously bad politics around this, but that to me is the most important thing.”
Let’s focus on one part of this: the contention that China's "stuff is good" and Germany is "going to lose."
Huawei in IT is Chinese industrial prowess exemplified. Its product portfolio encompasses smart consumer devices (watches, mobile phones, tablets), telco networking, enterprise IT (compute, storage, networking, data lake software, and public cloud services) in all its complexity and comprehensiveness, digital power gear for data centers, intelligent automotive systems, and in-house semiconductor development and manufacturing.
It has developed software and GPU hardware, and networking to be able to compete with Nvidia’s ecosystem, including KV Cache equivalence and AI factory systems with rack-level GPU pods. It has storage products that have propelled it to the number 2 supplier position world-wide, even though it is being denied access to the US market.
Huawei lacks Nvidia GPUs, hard disk drives and LTO tape. It has compensatory alternatives for the GPUs and tape but not disk drives, which means its OceanProtect backup systems are flash-based and hence expensive compared to HDD-based protection arrays. But they are faster, of course.
Huawei's US antipathy
We believe Huawei also has a profound dislike of the American government because of the USA’s technology export restrictions, and the prolonged 3-year (2018 to 2021) house arrest in Canada of its CFO, Meng Wanzhou, the daughter of its founder Ren Zhengfei. The US charges against her were eventually dropped.
What we have here in Huawei is an extremely well-motivated and world-class Chinese IT champion with enormous expertise and energy working to build its base in Europe. The lack of disk drives, Nvidia GPUs and software is not going to stop it. Dell, HPE and the array of mainly US-based networking and storage suppliers face a determined and expert competitor. Huawei has a good bridgehead in the EU that is set to grow larger at these US suppliers' expense.