Good morning from Hong Kong.
Clay Chandler and I spent yesterday at Huawei’s sprawling and palatial campus in Shenzhen, talking to company founder Ren Zhengfei about his extraordinary proposal last week to license his company’s 5G technology to an American company. Most Western commentators saw that proposal, made through the New York Times and the Economist, as a pure PR play. But Ren insists he is serious: “This comes from deep within my heart.”
Why would Ren give his company’s most valuable IP—source code, hardware design, production technology, testing methods, the whole ball of wax—to an American company, in effect creating a new competitor? Well, first of all, because he’s correctly come to the conclusion that U.S. concerns over the security of the Huawei ecosystem are not going away. Those concerns did not begin with Trump, and they will not end with him.
But intriguingly, Ren also argued a new American competitor would be good for his company.
“The time when we take a dominant position may be the time when we are closest to collapse,” the enigmatic entrepreneur told me. I made the translator repeat that sentence, to make sure I heard it correctly. That prompted Ren to go into a long discourse on the rise and fall of great powers.
He started with Michael Phelps. Just when the swimming superstar had become unbeatable, Ren said, he started to lose. Then he went on an extensive discussion of his own industry, and how giants like NEC, Fujitsu and Siemens, and then in the U.S., Lucent, Nortel and Motorola, had won and then lost the technological lead.
“For any company, if they are too overwhelmed by their own past, they are likely to lose their lead,” he said. “I am concerned that our next generation of leadership may be overwhelmed by the success of our company.”
At another point in the conversation, he put it this way: “Right now, I hold the sole whip in my hand. If I hand that whip to the U.S., a strong competitor would push our employees to always be vigilant.”
“If my employees can’t sleep,” he said, “then I can sleep.”
Did that mean the U.S. was doing Huawei a favor by pushing his back against the wall? Ren grinned, and turned up both thumbs. When I asked what U.S. company should take on his challenge, Ren said it would need to be big enough to continue to develop the technology, it would need a background in communications, and it would need to be global—the license would have no geographical restrictions.
Anyone interested? If so, Ren says they should reach out to him directly: xutiantian@huawei.com.
Good luck. More news below.
Alan Murray
alan.murray@fortune.com
@alansmurray
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This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
