About Huawei Global Analyst Summit
Huawei organized its Global Huawei Analyst Summit (HAS) from 17th– 19th April 2024 in Shenzhen, China. Hundreds of telecom and enterprise sector analysts, consultants, and media representatives participated to learn more about Huawei’s innovation and strategy. I had the opportunity to attend the keynote of the current CEO, various briefing sessions, and analyst roundtables. One of the consistent themes across all the sessions was Huawei’s focus on Artificial Intelligence. Huawei showcased several Pangu AI model use cases across environment, finance, healthcare, manufacturing, telecom, and other industries. Huawei has broadly categorized and identified the Gen AI application areas in four areas, i.e., Human Beings, Robotics, Environment, and Digital World, where each of these four areas is further dissected into various application areas. Human Beings broadly covers various areas of healthcare and life science, including health management, drug and vaccine design, and creative problem solving for drug discovery and R&D. Robotics largely covers multiple aspects of automatic and intelligent robotic use cases in manufacturing with the idea of making manufacturing simple, efficient, and safer. The Environment pillar covers sustainability, decarbonization, and green and renewable energy for cities and citizens. Lastly, the Digital World covers every digital interaction/touchpoint that human beings have in everyday lives.
While AI sits at the core of its strategy, Huawei demonstrated a cautious optimism on AI and highlighted several noteworthy implementation challenges with AI, for example, the lack of skills and innovation culture among organizations, the need for higher efficiency, the increasing complexity of running large scale, more extended sequence, and multimodal AI models. One of the most important observations was the massive growth in the required compute power for AI algorithms, which has increased by 400,000x in the last ten years. It is worth noting that this growth is directly correlated with the energy required for computing AI models, which also drives the demand for GWs of data center capacity. Several ideas and nuances were presented during the keynotes. Still, in summary, Huawei has carefully identified five key priorities for itself for 2024, which are commercial deployment of 5.5G, continued development of foundational AI applications to breakthrough in new areas, rapid transition to solar and wind energy as primary sources, drive growth in EV industry and shift from electrification to intelligence, and drive growth despite the macro-economic and geo-political issues.
Key Highlights from HAS 2024
From a broader strategy perspective, Huawei has developed a five-point strategy:
- Succeed through quality and achieve quality growth.
- Continue optimizing our portfolio to enhance resilience.
- Cultivate ecosystems and build a unified developer platform to drive shared success.
- Develop grid-forming solutions to address the huge impacts of solar & wind energy on power grids.
- Seize strategic opportunities in AI and advance All intelligence.
The idea of the first point is to strengthen their ISO 9000-based total quality management system to drive and streamline quality standards across the business functions at the organization level and include their suppliers, channels, and partners in the same. The second point focuses on continuous refinement and prioritization of high growth areas and obsoletion of aging solutions. The identified high-growth areas are ICT infrastructure, smart devices, Huawei Cloud, Digital Power, Intelligent Automotive Solutions, Laboratories, and HiSilicon. The next point primarily focuses on developing a robust ecosystem of partners and developers across ICT, specifically in the high growth areas mentioned in point # 2 above on software and database, OS / Chip development, and hardware. The ultimate objective is to build a unified developer platform based on Huawei Cloud for multiple ecosystems, e.g., HarmonyOS, Ascend, Kunpeng, etc. The fourth point primarily leverages the current theme of sustainability and decarbonization, with Huawei leveraging the clean energy solutions to not only offer it to their clients but also to leverage such solutions for their own operations as well. The final point has been in work since 2018, when Huawei announced the strategy for a full-stack, all-scenario AI portfolio. This year, Huawei has taken this strategy deeper by advancing this strategy with their Ascend cloud service and Pangu models, launching AI solutions to industries, revolutionizing network management, integrating AI with Huawei’s internal operations and R&D, and other areas.
During HAS 2024, many of Huawei’s clients and partners demonstrated their case studies with Huawei. The Ministry of Industry and IT (MIIT) presented a strong case for Autonomous Networks (AN) Level 4. It provides significant value to operators in delivering superior customer experience, fostering service innovation, streamlining network operations, and promoting environment-friendly practices. Additionally, networks and services offered as services and platforms will enhance digital transformation across various industries. In that light, the Ministry has launched AN Pilot Program 2.0, focusing on partner programs, collaborative innovation (cross-vendor interface and interoperability), assessment plans, and industry activities (large networking activities and advocacy papers). Similarly, one of Huawei’s large partners presented the case of Gen AI value in various industries and, more importantly, its application areas in Telecom. AN Level 4 is undoubtedly ambitious and comes with unique challenges. To start with, the participants across the value chain may have different expectations in the absence of a well-defined baseline or benchmark. Additionally, the path to leverage AI for AN Level 4 is ambiguous. It requires further clarity, which can be addressed by defining the Level 4 version of the AN framework (KEI, target architecture, AN map, etc.) and leveraging AI native infrastructure and telecom foundation model-based systems.
Huawei Cloud continues to be a major focus area. Continuing their significant success in China, Huawei launched Ireland and Indonesia in 2022 and Turkey and Saudi Arabia regions in 2023. Their engagement with Neom to leverage Pangu models for digital government was one of the triggers for setting up a cloud region in Saudi Arabia. Even in the APAC region, Huawei continued to drive momentum by acquiring new clients like KTB and KTC in Thailand to migrate their core financial systems and databases to the cloud; Sembcorp in Singapore migrated IoT and digital services to the cloud; and a few customers from the media industry in The Philippines. In the local Chinese market, Huawei engaged with ICBC to set up the world’s largest financial cloud with 26K+ nodes and migrated 99.9% of the infrastructure of CITC Bank to the cloud. Similarly, Huawei onboarded multiple large accounts like BYD, Toyota, Momenta, etc., during the last year for their cloud services. Huawei’s push towards an ecosystem approach is driving its growth; in 2023, Huawei added 10% partners to have over 45,000 partners by the end of the year. Moreover, over 300 solutions have been developed together with Huawei and its partners, which has benefited both Huawei and its partners. Backed by the shared success approach, Huawei Cloud now has 30 regions, 88 Availability Zones (AZs), 2400+ global carrier networks, and 2800+ CDN nodes in 170+ countries and regions. For 2024, Huawei has plans to push their KooVerse, which is their storage, compute, and networking portfolio, as well as three key products, i.e., GaussDB, Pangu Models, and CodeArts. Given the collaboration and shared success these products can promote, this is an intelligent move. The AI world primarily revolves around application areas, where CodeArts would come in handy, which would be duly supported by Pangu, GaussDB, and KooVerse. From an industry focus perspective, Huawei has identified Mining, Government, Finance, Rail, Power, and a few others to focus on through their Hybrid Cloud, which offers Edge and Public Cloud for computing, storage, network, AI framework, and development platforms.
Conclusion and Future Outlook
Despite the challenges faced by Huawei in several Western markets, Huawei’s growth is awe-inspiring. China is a huge market for Huawei, but Huawei’s ambition to continuously grow outside China is a result of its ability to offer cutting-edge technology and rapidly grow its partner base. Huawei’s R&D investment of $22.73 billion, which was an astonishing 23.4% of their annual revenue, was the 5th highest by a tech company in 2023. While this could be attributed to their self-reliance drive, their technology innovation across the telecom, enterprise, and consumer segments is impressive. Huawei has made significant investments and progress in their EVs and aspires to compete head-to-head with not only in the local but also in the global markets. This vision is very much possible for Huawei. However, there is still room for improvement, and Huawei has a few areas to improve. Despite a credible portfolio in sustainability and energy efficiency, Huawei’s recognition in this space is limited. In the Middle East specifically, sustainability has a massive growth potential (due to the growth of data centers), but Huawei’s market positioning is weak compared to its peers. Additionally, Entertainment and Sports (both physical and eSports) are some of the fastest growing markets in the UAE and Saudi Arabia. Still, Huawei’s positioning is restricted to the networking play in these industries and not in the other high-value areas of analytics, IoT, audience experience and the other regions.
