Exclusive: Huawei’s U.S. research arm builds separate identity

(Reuters) – The U.S.-based research arm of China’s Huawei Technologies Co Ltd – Futurewei Technologies Inc – has moved to separate its operations from its company dad or mum since the united statesgovernment in May put Huawei on a commerce blacklist, in line with two folks aware of the matter.

FILE PHOTO: A Huawei firm brand on the Shenzhen International Airport in Shenzhen, Guangdong province, China June 17, 2019. REUTERS/Aly Song/File Photo GLOBAL BUSINESS WEEK AHEAD

Futurewei has banned Huawei workers from its places of work, moved Futurewei workers to a brand new IT system and forbidden them from utilizing the Huawei title or brand in communications, a Futurewei worker informed Reuters on situation of anonymity. Huawei will proceed to personal Futurewei, the worker mentioned.

Milton Frazier, Futurewei’s common counsel, declined to touch upon the separation or the technique behind it, referring inquiries to Huawei spokesman Chase Skinner. Skinner didn’t reply questions in regards to the effort.

The division of operations, which has not been beforehand reported, comes as many U.S. universities have halted research partnerships with Huawei in response to U.S. authorities allegations that the corporate poses a nationwide safety risk. Many universities are additionally rethinking their partnerships with different Chinese corporations. right here

Huawei is among the many world’s largest telecommunications tools producers. The Commerce Department in May positioned the agency on its “entity list” of organizations that pose safety dangers. The Justice Department earlier filed costs in opposition to the agency alleging theft of commerce secrets and techniques and different crimes.

Futurewei is Huawei’s U.S.-based research and improvement arm. The agency employs tons of of individuals at places of work in Silicon Valley and the larger Seattle, Chicago and Dallas areas, in line with its staff’ LinkedIn pages. Futurewei has filed greater than 2,100 patents in such areas as telecommunications, 5G mobile networks, and video and digicam applied sciences, in line with information from the United States Patent and Trademark Office.

Until now, Futurewei’s operations have been largely indistinguishable from Huawei, the Futurewei worker mentioned. Futurewei had no separate model or perhaps a web site, the worker mentioned, and its employees typically recognized themselves as Huawei workers.

Both corporations have performed a variety of research partnerships and grant packages with U.S. universities.

Last yr, 26 members of Congress despatched a letter to Education Secretary Betsy DeVos, warning that Huawei’s partnerships with at the least 50 U.S. universities “may pose a significant threat to national security.”

The worry is that Huawei is utilizing college partnerships to scoop up research in areas resembling synthetic intelligence, telecommunications and robotics, which may very well be utilized in hacking or spying operations or to offer Chinese corporations an edge over U.S. rivals.

Some universities are scuffling with whether or not they can proceed partnerships with Futurewei – which isn’t on the federal government’s entity listing – at the same time as they droop funding and research preparations with Huawei.

The University of California-Berkeley, for example, is permitting researchers to maintain working with Futurewei after suspending all funding and data exchanges with Huawei in May, in line with steerage to college from Berkeley research chief Randy Katz.

Berkeley additionally suspended funding from Futurewei however continues to permit Futurewei workers to take part in research evaluations beneath sure restrictions, Katz wrote to college. Berkeley employees and college students now can work solely with Futurewei workers who’re U.S. residents or authorized everlasting residents and who agree in writing to not share sure delicate data with Huawei.

Companies on the entity listing are banned from shopping for components and parts from American corporations with out U.S. authorities approval. Most universities have additionally consulted the listing when making selections on grants or partnerships, mentioned Tobin Smith, of the Association of American Universities.

Katz mentioned he issued his steerage on Futurewei out of an “abundance of caution” to make sure researchers don’t break legal guidelines that stop sharing delicate U.S. expertise with entity-listed corporations. After consulting with the Commerce Department, Berkeley decided that Futurewei was not coated by the identical restrictions as Huawei, Katz wrote to college.

“Nevertheless, the U.S. government may take other actions against Futurewei,” he wrote.

The Commerce Department couldn’t legally place Futurewei on the entity listing as a result of it’s a U.S. firm, the company mentioned in a press release. Commerce spokesman Ari Schaffer didn’t reply questions on whether or not and the way the company regulates college research partnerships with entity-list corporations or their U.S. subsidiaries.

There’s nothing unlawful about schools taking grant cash or conducting research with such corporations, mentioned Erick Robinson, head of the China observe at regulation agency Dunlap, Bennett & Ludwig. What’s prohibited, he mentioned, is any switch of “essential confidential technology” to Huawei by any particular person or group.


The U.S. Justice Department in January introduced costs in opposition to Huawei and an government in reference to an alleged scheme to mislead banks and the United States about its enterprise actions in Iran, which is beneath U.S. sanctions. Prosecutors additionally charged the corporate with stealing robotic expertise from T-Mobile US Inc. The firm pleaded not responsible in each instances.

The crackdown on Huawei comes amid an escalating U.S.-China commerce struggle, during which the switch of U.S. expertise and mental property to Chinese corporations has been a degree of rivalry.

In addition to Berkeley, the listing of universities which have partnered with Huawei or Futurewei contains Stanford, Princeton and Columbia universities, the Massachusetts Institute of Technology, the University of Michigan and the University of Texas at Austin.

Congressman Jim Banks, an Indiana Republican who signed the letter warning about Huawei’s college partnerships, mentioned any transfer to separate the operations of Futurewei and Huawei wouldn’t resolve these considerations.

“Futurewei is Huawei,” Banks informed Reuters.

Banks launched a invoice in March known as the “Protect Our Universities Act” that might permit authorities companies to limit or cancel federal funding for any delicate research venture carried out with corporations that pose a risk of espionage.

The invoice names Huawei and several other different Chinese expertise corporations as threats, together with any firm owned or managed by the governments of China, Russia, North Korea or Iran.


UC Berkeley has obtained almost $eight million from the 2 corporations up to now two years, mentioned UC Berkeley spokesman Dan Mogoluf. Katz, Berkeley’s research chief, mentioned the varsity would rethink its moratorium on taking cash from Futurewei if the University of California’s Office of the President, offers its blessing.

The workplace, which oversees 10 public universities together with Berkeley, mentioned in a press release that it needs to steadiness safety considerations with sustaining an “open academic environment” for worldwide students.

At Stanford, Dean of Research Kathryn Moler mentioned the college “paused” new funding agreements from Huawei and Futurewei in December however has continued working with the corporations beneath current preparations. Moler didn’t reply questions on whether or not Stanford continues to simply accept cash from the corporations and declined to touch upon whether or not it might elevate its moratorium on new Futurewei funding if it separates its operations from Huawei.

Stanford laptop science professor John Ousterhout mentioned his lab was getting $500,000 yearly from Futurewei and had been in talks to spice up that to $2 million when he discovered of the moratorium.

“I’m not here to defend Huawei. It’s quite possible that Huawei has done some seriously bad things,” Ousterhout mentioned. But universities, he mentioned, “should not be a law enforcement tool or foreign policy enforcement tool.”

Andrew Chien, a University of Chicago professor who misplaced Huawei funding, mentioned the pc science group must “grow up” and acknowledge the type of safety dangers which have lengthy been managed by colleagues in such disciplines as physics, whose work has navy purposes.

“Computing has become so central and so important – and so dangerous,” he mentioned. “We’re beyond the point where you can deny that.”

(Corrects the title of the laws in paragraph 23, the Protect Our Universities Act of 2019, to repair an incorrect reference to the National Defense Authorization Act)

Reporting By Jane Lanhee Lee; Editing by Greg Mitchell and Brian Thevenot

Our Standards:The Thomson Reuters Trust Principles.

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