US media: Huawei secretly supports US research and awards millions of dollars in bonuses

Chinese telecom manufacturers are the sole funders of the optical competition, and Huawei says its role is not disclosed to avoid publicity.

By Kate O'Keeffe by Bloomberg on May 2, 2024

Huawei Technologies Co., a Chinese telecommunications giant blacklisted by the United States, is secretly funding cutting-edge research at American universities, including Harvard University, through an independent foundation based in Washington.

Huawei is the sole funder of a research competition that has awarded millions of dollars in prize money since its launch in 2022 and attracted hundreds of proposals from scientists around the world, including those at top U.S. universities whose researchers are barred from working with the company, according to documents and people familiar with the matter.

The competition is managed by the Optica Foundation, a branch of the non-profit professional association Optica, whose members' research into light is the basis for technologies such as communications, biomedical diagnostics and lasers.

A non-public document reviewed by Bloomberg said the foundation "does not require a specific Huawei to be the funding source or project sponsor of the competition" and that "the existence and content of this agreement and the relationship between the parties should also be treated as confidential."

The findings reveal a tactic being used by Shenzhen, China-based Huawei, which has been able to maintain its lead in funding international research, despite a series of restrictions imposed by the United States over the past few years on Huawei over fears that its technology could be used as a spy tool by the Chinese government.

Applicants and university officials contacted by Bloomberg, as well as one of the contest's judges, said they didn't know Huawei's role in funding the project until asked. Some of the applicants interviewed by Bloomberg said they believed the funding came from foundations rather than foreign entities.

There are 11 opportunities for Early Career Awards and Scholarships listed on the Optica Foundation website. With the exception of the Huawei-funded competition, all other competitions list individual and corporate funders. The Huawei-funded contest awards $1 million a year, 20 times the number of the site's second-richest annual cash prizes.

A Huawei spokesperson said the company and the Optica Foundation created the competition to support global research and promote academic exchanges. The spokesperson said that Huawei's name was kept secret to avoid the contest being seen as a promotional promotion and that there was no malicious intent.

Liz Rogen, Optica's chief executive, said in a statement that some foundation's donors "prefer anonymity, including those in the United States," and that "there's nothing unusual about this practice."

Rogan said Huawei's donation was reviewed by outside legal counsel and approved by the foundation's board of directors. "We are fully transparent about our funding and support for Foundation projects by the Optica Foundation Board of Directors, Optica Board of Directors and staff," she said.

The covert efforts in Washington stand in stark contrast to Huawei's overt initiatives in several European countries. For example, France and Germany are still home to Huawei's brand science centers, despite the European Commission's recommendation to ban Huawei equipment from member state networks due to security risks.

The Optica Foundation's 2023 annual report acknowledges Huawei in the "Highest Donors" section, with donors who have donated more than US$1 million since the organization was founded more than two decades ago. U.S. tech giants Google and Meta Platforms came in second with donations of $200,000 or more.

The report does not specify when, for what purpose, or how much these donors donated.

Many U.S. universities have asked researchers in recent years to cut ties with Huawei, fearing losing funding from federal sources, including the Pentagon and the National Science Foundation, due to security concerns. The university has also strengthened its policy of requiring scholars to disclose foreign funding.

Compliant with U.S. rules

Kevin Wolff, a partner at Akin Law Firm who specializes in export controls, said the foundation's secret funding arrangements most likely did not violate the Commerce Department's rules prohibiting individuals and organizations from sharing technology with Huawei.

That's because such rules don't apply to the type of research the competition solicits, Wolf said. Because, it is intended to publish scientific research. But he said the activity could not be legal if Huawei were sanctioned by the Treasury Department.

Research security experts say the arrangement lacks transparency and violates the spirit of policies in which universities and U.S. funding agencies require researchers to disclose whether they accept foreign funding.

They also said that some of the resulting research is likely to have both defense and commercial implications. In an online article, the Optica Foundation highlighted topics of "interest" including "seabed and space-based solutions for global communication networks" and "high-sensitivity optical sensors and detectors".

Huawei has been restricted by the United States for the past few years amid concerns that its technology could be used by China for espionage. "It's disgraceful that a prestigious research foundation anonymously accepts funding from a Chinese company because the company raises so many national security concerns from the U.S. government," James Mulvinon said.

Jeff Stoff, founder of the nonprofit Center for Research Security and Integrity, said the funding competition was an effective way for Huawei to influence "the research projects it wants to see, without having to contract directly with academic institutions." He said Huawei could recruit talent by sponsoring interested applicants and acquire intellectual property from their research in the future.

Kevin Garmachi, chief research security officer at Texas A&M University, said the university was unaware of Huawei's participation in the competition until Bloomberg contacted the university. The university then investigated the matter and learned that two researchers had applied for the prize, but neither of them knew the source of funding for the competition.

"We have a set of procedures to identify and prevent associations with Huawei, unless they are seriously confused like this," Gamacchi said.

At least one of the contestants was from the Massachusetts Institute of Technology, which said in 2019 that it would stop accepting new collaborations with Huawei. A spokeswoman for MIT declined to comment other than to point to the school's policies.

University Winners

The Optica Foundation asks the university where the researcher receives funding to accept the funding on behalf of the awardee. Several of them, including Harvard, USC, Vanderbilt University, and the University of British Columbia and Wilfrid Laurier University in Canada, declined to comment on whether they would act on Bloomberg's findings.

A spokesman for Harvard University said the university has a policy against cooperation with Huawei.

Eric Mazur, a professor of physics at Harvard University, said in a statement that he is chairman of the board of directors of the Optica Foundation, which the CEO said approved Huawei's arrangement: "As the foundation grows and continues to explore ways to broaden the program, we are committed to ensuring that policies related to funding sources are clear and transparent."

A spokesperson for USC, which has two honorees in the past two years, said USC abides by U.S. rules regarding reporting foreign gifts and contracts. "At the time of the disbursement, there was no indication of any foreign involvement, and we have no such indication at this time," the spokesman said in a statement.

Alan Willner, a professor of engineering at the University of Southern California, has been a judge for the competition, but he did not respond to a request for comment.

A spokeswoman for the University of British Columbia said the university had a partnership with the Optica Foundation and that neither the university nor the applicants were aware that the award was being funded by a third party.

Representatives from Washington University in St. Louis and the University of Arizona, which have one of the top optics schools in the United States, did not respond to multiple requests for comment about Huawei funding its award-winning applicants.

Huawei Optics Expert

Huawei became a member of the foundation's parent organization, Optica, in late 2021 and pledged to sponsor the competition, according to a person familiar with the situation. According to non-public documents reviewed by Bloomberg, Huawei plans to fund the event for ten years, meaning that Huawei will pay a total of $10 million based on past payments.

The Foundation is currently accepting proposals for a 2024 application cycle, which will run through May 21, with plans to award $100,000 each to 10 winners for the third consecutive year.

A Huawei executive participated in the 10-member selection committee for the competition. According to his LinkedIn profile, the scientist from Hong Kong, named Liu Xiang, is Huawei's chief optical standards expert.

He worked at Futurewei for more than seven years at Huawei's US subsidiary, and in 2021 published a book on 5G communication technology. Prior to receiving his Ph.D. from Cornell University, Liu studied at the Institute of Physics of the Chinese Academy of Sciences, which is under the State Council of China.

When the Optica contest launched in 2022, Liu posted an article on LinkedIn thanking the foundation for "this great initiative" and saying he would be joining the judging panel. ChadStark, executive director of the Optica Foundation and signatory of the document seen by Bloomberg, thanked Liu for sharing information about the competition. He did not admit that Huawei was the sole funder.

Last month, a promotional notice identified Liu as the host of Optica's virtual conference, which was titled "Cutting-Edge Technology for Revolutionizing Data Center-to-Data Connectivity." In its marketing materials for the event, Optica listed the employers of the panelists, all of whom were large U.S. tech companies, and described Liu only as a researcher at Optica and another professional association.