EU funding Huawei in critical tech projects despite bans on Chinese group

The EU is funding Huawei to run cutting-edge research on next-generation communication systems, even though several European governments have banned the Chinese tech group from their telecoms networks.

Huawei’s involvement in multiple sensitive projects, ranging from artificial intelligence to 6G and cloud computing, has come despite Brussels pressing for stricter curbs on the company over security fears.

The Financial Times identified Huawei as a participant in 11 projects under the bloc’s flagship Horizon Europe research and innovation programme, receiving up to 14 per cent of funding per scheme totalling €3.89mn.

More significant than the value of the funding is the fact that it puts Huawei at the heart of sensitive technologies in Europe despite moves by about a third of EU countries to push out “high-risk vendors” from 5G infrastructure.

Huawei provides infrastructure equipment and AI platforms for the EU-backed research projects, which also include quantum sensing, connectivity and a framework for autonomous driving.

Some analysts warned the company’s participation could undermine data security within the bloc as well as the EU’s ambition to stay self-reliant in developing critical technological infrastructure.

John Strand, founder of Denmark-based consultancy Strand Consult, said the Chinese group’s participation was “like inviting someone you don’t trust to visit your secret offices. It could be risky for Europe’s security and EU’s plan to have self-autonomy.”    

Jeroen Groenewegen-Lau, head of science, technology and innovation at Germany’s Mercator Institute for China Studies, said the selection of Huawei for projects involving sensitive technologies was “incredible” and questioned the screening process. “I am surprised this did not raise a red flag somewhere in the process,” he said.

The UK has put €900,000 into one of the EU projects, which started this year and covers sensing technologies used in machine-to-machine communication, even though the government has ordered telecoms groups to begin removing the Chinese company’s 5G equipment from networks.

Portugal has become the latest country to consider blocking Huawei from the 5G core network build, following similar moves by countries including Denmark and Sweden. The European Commission has recently warned it may need to legislate against high-risk groups being involved in 5G projects if other EU capitals fail to tighten national rules.

Stéphane Téral, chief analyst of market research company LightCounting, said: “These collaborations are showing that Europe cannot quit Huawei any time soon.”

In addition to the 11 Horizon Europe projects where Huawei received EU funding, it is also a participant in two programmes in which it received no EU grants. The commission said that the amount was the equivalent of less than 1 per cent of funding for 6G, AI and cloud computing-related research programmes under Horizon Europe.  

“The openness of the Horizon Europe work programme to international co-operation is balanced with the need to safeguard EU interests in strategic areas, as well as with respecting international rules and fundamental EU values,” the commission said.

Huawei said it had participated in more than 30 programmes within the EU’s flagship R&D framework since 2007. It added that international co-operation was vital and the company’s involvement in Horizon Europe was “evaluated independently by different panels of experts selected by the EU” and officially approved.

One of the projects involves research to build a high-security framework around the safety of connected cars and autonomous driving. US chipmaker Intel, Japanese automotive parts supplier Denso, and ​​Stellantis, the world’s fourth-largest carmaker, are also partners in the project.

Thanassis Giannetsos, the project co-ordinator, said Huawei had the “expertise” to support the consortium’s goal of building the methodology for future autonomous driving. “We are aware that some companies and their customers could have concerns on Huawei’s participation but that was already discussed in the phase of the proposal,” he said.

Another project co-ordinator said Huawei’s German subsidiary had been eligible to participate and companies were chosen based on “good personal experience, recommendations by partners, suitability to project goals”.

Co-ordinators for the other nine projects did not respond to requests for comment.