Thoughts on 5G, AI, Huawei, infrastructure, Belt & Road Initiative, Alexander The Great and satellites

The most important story in the world this week is the arrest by Canada of Meng Wanzhou, the CFO and heir to the Huawei dynasty in China. She was arrested by Canada at the request of the US. Ms. Wanzhou is the most important person in the world in AI and automation at the moment. 

Ms. Wanzhou is important because Huawei is the global leader in 5G technology, which is needed if AI, big data and machine learning are to progress. While Huawei is the world’s No. 2 smartphone marker, more importantly, it is the leader in telecommunications equipment, such as the hardware used for cellular towers, internet networks and infrastructure that enables modern communication.

For self-driving vehicles and the Internet of Things to happen to power our cars, our appliances, our pace makers, our hospitals, our airplanes, our farm equipment, our crops and everything else, we need 5G.  We also need it to collect and process big data in real time for machine learning.

Academic experts and people in tech agree that the next industrial revolution is 5G – it will be the backbone that enables AI and automation. 5G will allow businesses to acquire and process, wirelessly, huge volumes of data, delivered at great speed. In the 5G world, automated factories that already exist in many parts of Asia can be managed remotely in real time on a cell phone. And driving self-driving cars will be possible because 5G will deliver dependable real time data connections to enable safe self-driving vehicles, without radio blackspots, and the same is true for all transportation, including shipping, that will need real time data around the world, powered by 5G, to advance. But more than anything, 5G offers massive latency improvements, which is key for AI and automation.

5G infrastructure is different than 4G; the infrastructure is smaller, run on different radio waves and does not involve expensive cellular towers and such.

At the moment, Huawei controls 22% of the global 5G market. Nokia controls 13%, Ericsson controls 11% and ZTE is in fourth place at 10%.  In Asia, Huawei controls 38% of the market and in Europe, it controls 30%. Huawei is effectively shut out of the US market because of national security concerns. The concerns arise from the fact that China may have access to the Huawei 5G networks and data that flows through it, which poses international security risks. 

The EU likely will likely not shut out Huawei because telecom operators in Europe are already gearing up to use Huawei. To switch would involve changing architecture and infrastructure to change to a competitor, which will cost telecoms in the EU billions in sunk hard costs and billions more to switch over. Not only that, it will delay the implementation of AI and automation for countries in the EU at a time where there is an AI race going on. No country is going to want to delay its technology advancement and put itself at a technology disadvantage.

5G is important to China for many reasons, including for its Belt and Road Initiative launched in 2013 to connect China, Asia, Europe and Africa via infrastructure (including technology infrastructure) and allow it untrammelled access to Central Asia, Russia and Baltic Europe, the Persian Gulf and the Mediterranean Sea. As that infrastructure is being built, it is being built with 5G capabilities.

If all goes to plan, by 2025, China will have an infrastructure and communication global network that connects to the Motherland, and feeds it all of the big data from all the connected devices, highways, vehicles, ships, trains, highways, airports, bridges, tunnels, trucks, manufacturing plants, pipelines as well as all the personal and commercial big data from individuals using that infrastructure wirelessly in real time.

That is part of what is concerning for governments, namely that China is building, and will control, most of the significant infrastructure in the developing world, as well as the communications tied to and used by that infrastructure, and hence, much of the world’s data by 2025, which is an important part of the Belt and Road Initiative. Such control may bring with it an ability to access intelligence.

Making connections to control an empire is what Alexander The Great did 2,300 years ago – he built his empire essentially with infrastructure – building cities and towns and connecting them with roadways which spanned across countries and continents and served many purposes – they were the only routes of transportation and of communications over the whole empire. By controlling the transportation routes and the routes of communications, Alexander The Great had control and perhaps more importantly, access to intelligence, including intelligence on the movements of people and things necessary to protect the empire.

It gave him one more advantage as well – the right to collect payment for access to use the empire’s roads, which China will have over 5G in the developing world. How? Commercial access to their growing network of low orbit satellites that connect 5G services for a range of commercial uses, including the $160 billion Internet commercial aviation entertainment market.

And what is it they say about history? Plus ça change, plus c’est la même.

Update December 23, 2018 – China funds startups and millennials to develop and launch low orbit satellites for 5G.