Huawei is ramping up efforts in its cloud computing and artificial intelligence (AI) business, which still has access to US chips despite sanctions against the company, in a move to secure its survival, according to the Financial Times.
Huawei has seen rapid growth in its cloud computing business, which sells computing power and storage to companies, including giving them access to AI.
The cloud business is key to stabilizing Huawei in its home market, as Beijing will increasingly support the company through public cloud contracts.
Even before the coronavirus pandemic struck, Huawei observed the acceleration of cloud computing – putting its unit on an equal footing with its smartphones and telecoms equipment businesses.
In January, the company announced changes to its organizational structure and management team, creating a fourth business group for its cloud computing and AI divisions in a sign that the telecom giant is aiming its attention at this growing sector.
A focus on cloud computing puts Huawei in direct competition with the biggest Chinese players including Alibaba and Tencent, as well as global heavyweights such as Amazon and Google.
The changes echo Huawei’s “Cloud Only” strategy in which the company pledged to invest more resources and funds to build a “full-stack cloud platform.”
This shift in focus is necessary because the outlook for Huawei’s smartphone and other consumer products unit is impaired in the face of US restrictions. The consumer unit was responsible for half of Huawei’s $122 billion revenue last year.
The Trump administration has restricted technology exports to Chinese companies in particular, notably Huawei, citing national security risks.
Meanwhile, vendors of semiconductors needed for cloud computing are still allowed to ship to Huawei if they have a license exempting them from the restrictions.