More than a decade after Huawei allegedly tried to steal technology from T-Mobile, the Chinese telecommunications giant is finally before a federal jury in Brooklyn. Two days before opening statements, Huawei unveiled a new flagship phone built around one of its own Kirin processors; a week later, it laid out an increasingly aggressive roadmap for the AI chips and computing systems it hopes will compete with Nvidia.
The case asks what Huawei did years ago when it wanted American technology. The hardware arriving while the jury sits tells a different part of the story: what Huawei did after Washington decided it should no longer have access to it.
Eight Years
Federal prosecutors first charged Huawei in 2018 and publicly unsealed the case the following January. A broader racketeering indictment followed in 2020, alleging that the company spent years obtaining technology from American firms through fraud and deception, including T-Mobile's Tappy phone-testing robot, source code, antenna technology and other trade secrets. Prosecutors also accuse Huawei of concealing its relationship with an Iranian affiliate so that it could move money through the American financial system despite U.S. sanctions. Huawei denies the charges; it argues that prosecutors have recast legitimate business activity and isolated employee misconduct as a criminal enterprise.
The trial may run for roughly three months, although getting to a jury took eight years. Huawei didn't spend those years standing still. It lost access to critical American technology, watched its smartphone business collapse, built its own operating system, redesigned processors around increasingly restrictive export controls, found substitute suppliers and eventually worked its way back toward its old scale.
Peter Thiel described an earlier version of this problem when he talked about PayPal's first years as a “race between technology and politics.” PayPal was moving into a part of the financial system where the rules were still catching up, and Thiel's instinct was to grow quickly enough that regulators would eventually encounter an established network rather than a proposal they could simply stop. He later described the result as a fait accompli.
Obviously, PayPal's fights with financial regulators bear little resemblance to a federal racketeering prosecution involving allegations of trade-secret theft and sanctions evasion. The useful part of Thiel's observation is the clock. Companies ship products, engineers redesign systems, suppliers disappear and new suppliers emerge while institutions work through conduct that may already be several product generations old.
The Justice Department understood that problem when it sued Microsoft in 1998. Janet Reno sought preliminary relief because waiting for the full case threatened to give Microsoft enough time to capture the browser market; she warned that the company's conduct could inflict “irreversible harm to competition” while the litigation crawled forward. That wasn't bureaucratic impatience. DOJ recognized that a remedy arriving after the market had reorganized itself might be legally satisfying and commercially irrelevant.
A generation later, the department sued Google over search in October 2020, before ChatGPT existed as a public product. Judge Amit Mehta found in 2024 that Google had illegally maintained monopolies in general search and search advertising; by the time he reached remedies in 2025, however, generative AI had altered the market enough that he wrote it had “changed the course of this case.” The court had finally caught the market it set out to regulate, only to discover that the market had kept moving.
Huawei makes the timing problem more complicated because Washington isn't dealing solely with a company responding to incentives inside a market. It is dealing with a Chinese national champion operating inside an industrial policy that increasingly treats every foreign dependency as a vulnerability worth eliminating.
Before the Verdict
Washington didn't wait for a Brooklyn jury before acting against Huawei. In May 2019, only months after prosecutors publicly unveiled the first case, the Commerce Department placed Huawei and dozens of its affiliates on the Entity List and restricted their access to American technology. Commerce tightened those controls the following year by reaching certain semiconductors manufactured overseas with American software, technology or semiconductor equipment.
That second move mattered because the supply chain extended far beyond whatever country appeared on the finished chip. Huawei could design a processor in China and contract with a foundry somewhere else; the foundry could still depend on American design software, fabrication equipment or other tools. Washington therefore reached deep into factories it didn't own and jurisdictions it didn't control because American technology occupied enough indispensable positions in the semiconductor stack.
Huawei felt the pressure quickly. After losing access to advanced chips and Google's mobile ecosystem, the company saw annual revenue fall about 29 percent in 2021, while its premium smartphone business suffered even more visibly. Engineers had to redesign products around worse options; managers had to locate substitute suppliers; the company began spending heavily to recreate technologies it had previously been able to purchase.
Those years bought Washington something valuable: time. They also handed Huawei a remarkably detailed shopping list.
There is a recurring problem in economic coercion here that goes well beyond semiconductors. A country often has the greatest leverage over something precisely because the target hasn't yet bothered to reproduce it. Once the supplier weaponizes the dependency, the economics of duplication change. A substitute that looked wasteful at normal commercial prices can look perfectly rational when the alternative is strategic exposure. Nobody builds a second refinery, payments network or machine-tool ecosystem because redundancy is elegant; they build one because someone has just demonstrated why relying on the first was dangerous.
Huawei received that lesson rather emphatically.
Building Around the Controls
HarmonyOS began as an answer to the possibility that Huawei could lose access to Google's Android ecosystem; the emergency passed, but the operating system remained and grew into something larger. Huawei also pushed deeper into semiconductor design, enterprise software, automotive technology and domestic supply chains while Beijing and Chinese industry directed enormous amounts of money and attention toward many of the same dependencies.
The recovery now appears in Huawei's accounts. Revenue reached 880.9 billion yuan in 2025, close to its 2020 peak, while a premium smartphone business that looked badly wounded several years ago is again releasing expensive flagship devices built around Huawei's own Kirin processors. The Mate XT2 makes the point rather conspicuously: it runs without the Google ecosystem Huawei once depended upon and uses another Kirin processor produced under semiconductor restrictions designed, among other things, to make precisely this technological climb harder.
The restrictions did make it harder. That's important, because treating the reappearance of an advanced Huawei phone as proof that export controls failed throws away most of the useful information. Controls can matter by raising costs, reducing performance, constraining production or forcing a company to spend six years rebuilding something it once ordered from a supplier. Time has economic and strategic value even when it doesn't produce permanent technological paralysis.
Huawei's newest AI roadmap shows where the adaptation is going next. At Huawei Connect in September, the company said development of its next Ascend generation was running ahead of its previous schedule, with the Ascend 960DT now planned for the first quarter of 2027 and additional generations following annually through the end of the decade. A faster product cadence matters, although the more interesting announcement concerned everything Huawei intends to build around those processors.
Its new Peerium architecture and UnifiedBus interconnect aim to connect thousands of processors into much larger computing systems. Huawei says an Atlas 960E SuperPoD will contain 4,096 NPUs; combinations of those systems could eventually reach hundreds of thousands of processors, while the company has described larger configurations approaching one million NPUs.
Huawei is describing engineering targets, of course, rather than demonstrating that it can economically operate a million-chip system with acceptable yields, power consumption, reliability and utilization. Still, the direction deserves attention because Huawei isn't limiting the contest to whether one Ascend accelerator can match one Nvidia accelerator. It is trying to make that comparison less important.
If a Chinese accelerator remains less capable, Huawei can compensate with more accelerators, faster interconnects, larger clusters, better scheduling software and tighter integration across the stack. That approach doesn't make the disadvantages disappear; in some respects it makes them more expensive. More chips require more memory, packaging, networking, electricity and cooling, while enormous clusters introduce reliability and software problems of their own. Rather, Huawei is shifting the problem upward. Washington constrains the processor; Huawei pushes toward fabrication. Washington pressures fabrication; Huawei needs better memory and packaging. Individual chips lag; Huawei starts treating the cluster as the product.
The history of computing is full of this sort of substitution. Engineers rarely respond to a constraint by politely accepting it; they move the burden somewhere else in the system. Mainframes yielded work to distributed machines, slow storage encouraged elaborate caching, expensive bandwidth produced compression, and weaker processors have often survived by multiplying. There are limits to every workaround, obviously, but there is no reason to expect Chinese engineers to approach export controls with less imagination than engineers approach every other unpleasant design constraint.
Huawei itself supplied a useful caution against getting carried away with the roadmap. Eric Xu acknowledged this month that the company still can't produce enough AI computing equipment to satisfy Chinese demand. That admission tells us considerably more about the current effectiveness of the controls than a photograph of an Ascend processor on a conference stage.
Where the Leverage Still Lives
High-bandwidth memory, or HBM, has become one of the more important pressure points. HBM sits close to an AI processor and moves data into it quickly enough to keep the chip working near full capacity; advanced accelerators require large quantities of it, while U.S. restrictions have made the best HBM substantially harder for Chinese firms to obtain.
Huawei's systems strategy makes that constraint more interesting, not less. If the answer to a weaker chip is more chips, then the company also needs more memory, more advanced packaging, more networking equipment, larger power systems and enough manufacturing capacity to produce all of those components with tolerable yields. Architecture can compensate for some shortcomings in the underlying silicon; it can also magnify demand for almost everything surrounding it.
Chinese firms are working their way through those dependencies as well. CXMT said this month that its fifth-generation DRAM manufacturing platform had entered mass production, another step in China's attempt to reduce its reliance on foreign memory suppliers. Conventional DRAM isn't leading-edge HBM, and mass-producing one shouldn't be treated as evidence that China can suddenly manufacture the other at the volumes and performance levels frontier AI systems require. It does, however, show memory moving along a familiar path: foreign dependence creates political urgency; political urgency attracts capital; capital produces substitutes, initially worse and more expensive, which improve over time.
China has made extraordinary progress in semiconductor manufacturing, but leading-edge production still depends on categories of equipment and technology controlled by the United States and allied countries. Lithography receives most of the attention because enormous machines firing droplets of molten tin with lasers are, admittedly, more interesting than metrology. Yet deposition, etching, inspection, electronic-design software, advanced memory, packaging and dozens of less glamorous parts of the process can constrain output just as effectively.
Huawei once depended heavily on foreign chips it could simply buy. Restrictions shifted more of the problem toward fabrication; advances in fabrication increase the importance of equipment, memory, yields and production scale. Larger clusters raise the importance of interconnects and electricity. Better domestic memory will eventually put more pressure on packaging or manufacturing tools. Semiconductor independence isn't one technological breakthrough waiting to happen; it is a long exercise in discovering the next annoying thing that somebody else still makes better.
That is why arguments over whether export controls have “worked” tend to age badly. Huawei's 2021 collapse was real; its recovery is real too. Chinese firms now produce advanced chips that many observers several years ago doubted they could build under the controls, while manufacturing and memory constraints continue to make those chips harder and more expensive to produce at scale. Both facts matter because the controls aren't a binary machine that either prevents technological progress or fails. They alter the cost and speed of that progress, while the target spends money and engineering effort trying to make each restriction less relevant.
The dependency keeps moving; so does the leverage.
Outside Brooklyn
The jury still has a consequential legal question to answer. Prosecutors must prove the criminal charges beyond a reasonable doubt; Huawei continues to deny them, while testimony now includes evidence concerning the company's alleged relationship with Skycom in Iran and its acquisition of American technology. Whatever verdict the jury eventually returns will resolve questions about liability for conduct that stretches back years.
Meanwhile, the industrial contest that grew around the case continues on an entirely different clock. Suppliers change while witnesses testify; Chinese engineers redesign chips and memory systems while lawyers argue about conduct from the 2010s; Huawei is planning processors it expects to ship in 2029 before the Brooklyn jury has decided what happened a decade earlier.
Washington has also begun competing farther downstream. This month, the Export-Import Bank approved nearly $100 million in financing for Africell to purchase American and allied telecommunications equipment as the United States tries to challenge Huawei's position in African networks. That effort matters because the contest has moved beyond preventing Chinese firms from acquiring American technology. Washington increasingly has to compete against Chinese technology after Huawei has already become somebody else's incumbent supplier.
Incumbency creates its own kind of leverage. Telecom operators don't replace networks because a geopolitical argument became more persuasive; they replace them when financing, equipment, maintenance, compatibility and switching costs make the alternative worthwhile. Huawei spent years benefiting from that arithmetic abroad, sometimes with substantial support from Chinese policy banks. If Washington wants countries to choose something else, export controls alone can't make the sale.
A technological chokepoint remains most valuable while the other side still depends on it. Pressure on Huawei helped turn semiconductor independence into a strategic priority in Beijing; the investment unleashed by that pressure now targets precisely the technologies that gave Washington leverage in the first place. That doesn't mean Washington made a mistake by using the leverage. It means leverage depreciates.
For now, the United States and its allies still possess a considerable amount of it. Huawei acknowledges that it can't make enough AI equipment to satisfy domestic demand; advanced memory remains constrained; leading-edge manufacturing equipment remains difficult to replace; Chinese fabrication still carries cost, yield and performance disadvantages that matter enormously when a company has to produce chips by the tens or hundreds of thousands rather than display one functioning device.
Those are the measurements worth following now: how many Ascend accelerators Huawei can actually ship, what they cost, where the memory comes from, how quickly fabrication yields improve, how much performance Huawei can recover through system architecture, which imported tools remain hardest to replace and, ultimately, how much time those dependencies still buy.
The jury in Brooklyn is deciding what Huawei did when it wanted American technology. Washington has a different question to answer now: how much American technology does Huawei still need?