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Huawei CEO is considering licensing the company's 5G tech exclusively to a US firm

Key Points
  • Chinese tech giant Huawei is willing to exclusively license its 5G technology to a U.S. company to create a level playing field for competitors, CEO Ren Zhengfei said on Thursday.
  • It's a license that would help the American firm achieve economies of scale to support its business, Ren told CNBC's Christine Tan.
  • 5G is the next generation of high-speed mobile technology that aims to provide faster data speeds and more bandwidth to carry growing levels of web traffic.
Ren Zhengfei, CEO of Huawei speaking with CNBC at Huawei headquaters in Shenzhen, China.
Justin Solomon | CNBC

Chinese tech giant Huawei is willing to exclusively license its 5G technology to a U.S. company to create a level playing field for competitors, CEO Ren Zhengfei said on Thursday.

5G is the next generation of high-speed mobile technology that aims to provide faster data speeds and more bandwidth to carry growing levels of web traffic. For its part, Huawei is seen as one of the leading names in the development of 5G infrastructure.

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Huawei CEO: Considering licensing the company's 5G tech exclusively to a US firm to use

It's an exclusive license that would help the American firm achieve economies of scale to support its business, Ren told CNBC's Christine Tan at a panel discussion at Huawei's headquarters in Shenzhen, China.

He explained that it should be a U.S. company because firms in Europe, Japan, and South Korea already have the relevant technologies needed to develop 5G.

"But the U.S. currently does not have something like this," Ren said, according to a translation verified by CNBC. "I think that we should give (an) exclusive license with one U.S. company. After getting a license, they will be able to take our technology to compete with markets around the world."

The license would include Huawei's proprietary 5G tech including source code, hardware, software, verification, production, and manufacturing know-how, according to the business leader. "All of these are included in the package, and if they need it, we can also license the design of the chipsets."

Huawei has a large portfolio of patents critical to 5G technology. If it licenses its 5G technology, it could open new revenue streams for the company.

Ren explained that he thinks the race to develop 5G should start from a level playing field. "We want to give everyone the same starting point," he said but added that he was confident his company could then take the lead as developments continue.

Earlier this month, Huawei showed off a new 5G processor for its mobile devices as part of its efforts to ramp up its chip technology business.

Huawei's technology has come under international scrutiny and some countries — including the United States, Japan, and Australia — have banned the company from participating in 5G development within their borders.

Washington has alleged that Huawei's 5G tech could enable Chinese espionage and has urged allies to ban the company. Huawei has repeatedly denied that its products represent any risks.

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In May, the U.S. added Huawei and its affiliates to a blacklist, the so-called Entity List — effectively halting its ability to do business with American companies. Washington later softened its stance by giving temporary reprieve to the Chinese tech company. President Donald Trump has said before that Huawei could potentially be part of the ongoing trade negotiations with Beijing.

Despite pressure from the U.S., Huawei said it has scored more than 50 commercial 5G contracts globally as it continues to strike deals with carriers worldwide. That number puts it ahead of its closest competitors Ericsson and Nokia, according to Huawei's latest publicly released contract numbers.

Ren told employees in August that the company is facing a "life or death crisis" and laid out a strategy for the Chinese telecommunication giant going forward.

On Thursday, Ren predicted that the biggest industry in the future will be artificial intelligence. He said he hoped the U.S. would not subject Huawei to the blacklist.

— CNBC's Grace Shao contributed to this report.

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