SHANGHAI -- Top Chinese telecom equipment suppliers Huawei Technologies and ZTE are stepping up marketing of their AI services in Belt and Road countries as the U.S. tightens sanctions targeting Chinese technology companies.
Huawei Deputy Chairman Eric Xu, now serving as rotating chairman, delivered a pitch Wednesday in a keynote address at the MWC Shanghai industry exposition.
"We're ready and willing to work together, helping carriers explore opportunities unique to them and carve out the right pathways to long-term, sustainable growth," Xu said.
Huawei has been barred from multiple Western countries on concerns over data security and other risks. In response, the company has been expanding business in the Global South and offering artificial intelligence services there.
Such countries often face steep hurdles in developing AI, and many of them overlap with China's cross-border Belt and Road infrastructure initiative.
Several private-sector Malaysian companies have exchanged memorandums of understanding with Huawei to make use of the Chinese company's AI, the Malaysian government announced in April. A major logistics company will incorporate AI into warehousing and supply chain operations, for example, and an information technology company will use AI to develop an e-commerce and customer loyalty platform.
Uzbekistan, with its strong political ties to China, is also turning to Huawei. The Central Asian country has set a goal of growing its AI-based software and services sector to $1.5 billion by 2030. A digital government cloud at the heart of this plan was built using Huawei technology.
In Uzbekistan's capital of Tashkent this May, Huawei announced an AI data center strategy that will help realize the government's objectives. Data centers are not just infrastructure, but national assets that power economies and innovation, a Huawei executive said at the event.
Huawei invests more than $140 million annually in AI data center research and development, and the company has many data centers in China and abroad. Partnering with Chinese companies, which offer low costs, is an attractive choice for countries with little technological buildup.
Annual global AI infrastructure investment, mainly in servers, will swell to $223 billion in 2028, according to U.S. research firm IDC. The U.S. is currently the largest market, but other regions are set to gain larger shares.
IDC projects the Chinese market's average annual growth rate at 35% in the five years through 2028, compared with 34% for the U.S. and 21% for the Asia-Pacific region and for Europe, the Middle East and Africa. Chinese companies will focus on capturing the growing demand in Belt and Road countries.
ZTE signed a memorandum of understanding with Malaysian telecom giant CelcomDigi in March to use AI to improve the quality of communications services.
In May, ZTE announced a partnership with major Southeast Asian telecom company XLSmart Telecom Sejahtera. The tie-up covers multiple areas, including 5G network development. ZTE conducted a proof-of-concept trial of new technology in June with a major telecom company in the United Arab Emirates.
ZTE Chief Development Officer Cui Li said at MWC Shanghai that the company will work with global partners to advance the spread of AI step by step.
For Chinese players, cost is the biggest competitive advantage.
Chinese companies can use their buying power to procure equipment at low cost from domestic supply chains. They also have expertise in setting up base stations, for example.
Huawei held the top global share in telecom equipment revenue in 2024, at 31%, according to research firm Dell'Oro. This was more than double the share of either Sweden's Ericsson or Finland's Nokia.
Huawei and fourth-ranked ZTE together had more than a 40% share. The strategy is to profit from AI-related businesses, using 5G communications and cloud services as the foundations.
Huawei is developing its own chips, which are key to AI servers. The U.S. announced tighter restrictions on AI chips in May, issuing guidance that using certain Chinese-made chips risks violating U.S. export controls.
Huawei founder and CEO Ren Zhengfei responded in an interview with state media People's Daily that the U.S. "overstates our achievements -- we're still one generation behind in single-chip performance."
Ren emphasized the need for investing resources to catch up. But Nvidia CEO Jensen Huang has said Huawei will benefit from American export controls, echoing a widely held view.
