Former CEO and chairman of Google, Eric Schmidt, has launched an extraordinary and blunt assessment of Chinese networking giant Huawei Technologies.
Schmidt told the BBC that the Chinese firm poses challenges to national security and has engaged in unacceptable acts in the past. He also alleged that information from Huawei routers ended up in Chinese government hands.
But Victor Zhang, Huawei’s UK chief, responded Schmidt’s broadside and told the BBC “it is simply not true.”
Schmidt carved himself a respected position in the tech sector, because of his hugely instrumental role in guiding Google from a tiny startup in California, into the global business it is today.
In 2001 Schmidt was hired by Larry Page and Sergey Brin to run the startup called Google as its chief executive.
Schmidt was the sensible one who ran the company, and his role was what all three jokingly referred to as the “adult supervision.”
In 2004 he successfully oversaw the hugely successful initial public offering (IPO), despite the world being hugely wary of tech IPOs after the dot-com bust.
That IPO turned Google into one of the world’s most valuable companies.
Schmidt also guided the Android operating system during the key years of the modern smartphone era, and helped turn Android into the most widely used mobile operating system in the world – an OS that is still used by Huawei devices.
Another Schmidt success was overseeing the huge corporate restructuring of Google in 2015, until it eventually became a business unit of the holding company Alphabet, whose holdings now include Google, YouTube, Nest and Waymo.
He also negotiated with governments on regulatory matters, and was reportedly instrumental in convincing the US Federal Trade Commission not to pursue antitrust actions against Google in the United States.
Schmidt remained as chief executive of Google until 2011 when he stepped down and Larry Page took over as CEO.
Schmidt remained as chairman and then later as a board member.
In 2019, after 18 years of service to both Google and then Alphabet, Schmidt officially stepped down from the board, and he now chairs the Pentagon’s Defence Innovation Board.
But now Schmidt has made his extraordinary intervention on Huawei, at a time when the United Kingdom reviewing whether to continue letting Huawei help build its 5G mobile networks.
“There’s no question that Huawei has engaged in some practices that are not acceptable in national security,” Schmidt told a BBC Radio 4 documentary.
He said it was possible to think of the company as a means of “signals intelligence” – a reference to intelligence agencies such as the the UK’s GCHQ or America’s NSA.
“There’s no question that information from Huawei routers has ultimately ended up in hands that would appear to be the state,” Schmidt reportedly added. “However that happened, we’re sure it happened.”
However Schmidt said the West should respond by competing with China and its technologies, rather than disengaging.
He added that the real issue with Huawei lies in the challenge to US leadership it represents: a Chinese company operating on a global stage that is building a better product than its competitors.
“It’s extremely important that we have choices,” he told the BBC. “The answer to Huawei… is to compete by having a product and product line that is as good.”
In February this year, US Attorney General William Barr suggested that the United States and its allies take a ‘controlling stake’ in Ericsson and Nokia to counter Huawei.
During the BBC interview, Schmidt admitted he had underestimated China’s ability to innovate.
“I have carried the prejudices about China in my years working with them,” he reportedly said. “That they’re very good at copying things, that they’re very good at organising things, that they throw large numbers of people at it. But they’re not going to do anything new. They’re very, very good at stealing, if you will, our stuff. Those prejudices need to be thrown out.”
“The Chinese are just as good, and maybe better, in key areas of research and innovation as the West,” he warned.
“They’re putting more money into it,” he reportedly said. “They are putting it in a different way, it is state-directed in a way that is different from the West. We need to get our act together to compete.”
He warned of China’s growing expertise in areas such as artificial intelligence and quantum computing.
Huawei for its part denied Schmidt’s allegations that it is an arm of the Chinese state, or passes on customer data to the authorities.
“It is simply not true,” Victor Zhang, Huawei’s head of UK operations, told the BBC. “Huawei is a private company, 100 percent owned by its employees. Huawei is independent from any government, including the Chinese government.”
Earlier this month Huawei emphasised its “ongoing commitment” to providing connectivity technologies in the UK, as the Chinese firm marks 20 years of presence in the British market.
“We’ve been here for 20 years and were integral in building the 3G and 4G networks we all use every day,” said Zhang at the time. “Today’s letter underlines Huawei’s ongoing commitment to improving connectivity for everyone in the UK.
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