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Huawei Nears Revenue Peak Again, Signals Post-Sanctions Comeback

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Huawei is set to announce its full-year financial results, revealing a near-return to its 2020 revenue peak despite years of U.S. sanctions. The Chinese tech giant is expected to report revenues of 860 billion yuan ($118 billion) for 2024—just shy of the record 891 billion yuan it achieved before U.S. restrictions slashed its consumer business and chip supplies.

Once in “survival mode,” Huawei now appears to be thriving again. The company has diversified into new sectors like smart driving technology, cloud software, and domestic chip development. These efforts have helped mitigate the impact of sanctions that once seemed poised to cripple its international business.

Smartphones and Software Recovery
Consultancy Isaiah Research estimates Huawei shipped over 45 million smartphones in 2024—up more than 25% year-on-year—despite continued constraints in chip yield rates. Its homegrown operating system, HarmonyOS, now powers over a billion devices. Meanwhile, Huawei’s own enterprise software system, “MetaERP,” has replaced U.S.-origin platforms like Oracle.

Auto Ambitions Paying Off
One of Huawei’s most successful pivots has been into smart vehicles. Its Aito brand—developed with Dongfeng-backed Seres—tripled its sales last year, driven by models like the M7 and M9 that feature Huawei’s driver assistance technologies. The company is also collaborating with other Chinese automakers like Chery, BAIC, JAC Group, and SAIC Group.

Innovation Under Pressure
Experts say sanctions pushed Huawei and its domestic partners toward greater innovation. “Huawei has shown incredible resilience in the face of this national state-led effort,” said Paul Triolo of the DGA-Albright Stonebridge Group. He noted that Huawei’s resurgence has led to broader industry collaboration and technological independence within China’s IT sector.

Looking Ahead: Global Patchwork Strategy
While HarmonyOS and its AI chips are gaining traction, Huawei still faces challenges regaining market share in the West due to limited access to Android. However, its infrastructure and data services are growing in markets like the Middle East. Huawei’s global strategy will likely be a “patchwork affair,” said Triolo, but it could dominate in alternative AI ecosystems across key emerging markets.

Beyond Survival
With ambitions to integrate AI into industrial communication systems and expand its connected software offerings, Huawei’s focus is now on long-term growth. It also hinted at renewed international smartphone pushes, such as its high-profile Mate XT foldable phone launch in Malaysia earlier this year.

Alibaba to Restart Hiring Amid Optimism, Cautions Against AI Investment Bubble in the U.S.

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Alibaba Group Chairman Joe Tsai announced on Tuesday that the tech giant will resume hiring, fueled by increased confidence following a significant meeting between President Xi Jinping and major Chinese tech entrepreneurs in February. Tsai also expressed concerns about large-scale artificial intelligence (AI) investments in the U.S., suggesting they might signal the start of a bubble.

Tsai praised the rare meeting, which included Alibaba co-founder Jack Ma, marking a shift in Beijing’s approach to the tech sector. A regulatory crackdown on the industry several years ago had slowed growth, reduced investment, and led to layoffs. Tsai believes the meeting sent a clear message to the business community: it was time to reinvest and rehire employees.

After a decline in Alibaba’s workforce over the past 12 quarters, Tsai is optimistic that the company has hit rock bottom and plans to start rebuilding. China’s economy has faced several challenges, including slow growth and a real estate debt crisis, leading to job insecurity and weak consumer sentiment. However, Tsai emphasized that hiring would lead to greater job security and income growth, boosting business and consumer confidence.

Tsai also highlighted the success of DeepSeek, a Chinese startup disrupting the AI sector with affordable models, which has helped restore confidence in China’s tech industry. This success, alongside Alibaba’s significant investments in AI, will likely drive the need for more hiring in the sector.

While Alibaba is investing heavily in AI, Tsai expressed concern about the massive investments happening in the U.S. He referred to large investment figures, such as $500 billion, as unnecessary, suggesting that investments are being made ahead of actual demand. Tsai specifically voiced worries about speculative data center construction, seeing signs of a potential bubble in the U.S. market.

In comparison, Alibaba plans to invest 380 billion yuan ($52 billion) in its cloud computing and AI infrastructure over the next three years. The positive sentiment around China’s tech sector, boosted by Xi’s meeting and the success of companies like DeepSeek, has contributed to a 24% rise in Hong Kong’s Hang Seng Tech Index this year.

High-Flyer, the AI Quant Fund Behind China’s DeepSeek, Shifts Focus to Artificial General Intelligence

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Key Highlights:

  • High-Flyer, a quantitative hedge fund, shifted its focus from managing a $13.79 billion portfolio to developing Artificial General Intelligence (AGI).
  • The fund, officially known as Hangzhou Huanfang Technology Ltd Co., is reorienting its resources to pursue AGI, which is a more advanced form of AI capable of surpassing human abilities in most economically valuable tasks.
  • The DeepSeek AI model, which has gained significant attention in the tech world, is part of this new direction under the leadership of Liang Wenfeng, High-Flyer’s founder and the leader of DeepSeek.
  • DeepSeek’s AI models have garnered praise from Silicon Valley and sparked concerns about the computational efficiency of U.S. firms’ AI models, given DeepSeek’s claims of utilizing far less computing power.

Background on High-Flyer’s AI Investment Strategy:

  • High-Flyer has heavily invested in supercomputing clusters, including those made up of Nvidia A100 chips, despite U.S. export controls. These clusters have been crucial for the development of its AI models.
  • The company has also spent millions on high-end Nvidia chips, setting up two AI supercomputing clusters with a combined investment of over $1.2 billion.
  • DeepSeek, which utilizes much less powerful chips (Nvidia’s H800 and H20), has nonetheless sparked debates on its computational capabilities, with some tech executives speculating it may have access to 50,000 Nvidia H100 chips, potentially bypassing U.S. export restrictions.

Future Prospects:

  • Liang Wenfeng has indicated that High-Flyer is not currently seeking external funding for DeepSeek and is more focused on overcoming challenges related to chip restrictions rather than financial concerns.
  • The company’s strategic shift towards AGI signals a long-term commitment to advancing AI technology for human benefit, even as it navigates international tensions over AI and technology exports.