Why is Huawei downplaying its chips?

IT MAY SEEM like odd messaging from a tech chief. But Huawei Technologies Co. founder Ren Zhengfei said that Americans have "exaggerated" his company's chip achievements, which "still lag behind the US by a generation."

- Bloomberg

When it comes to the race for the hardware needed to support artificial intelligence, his company "isn't that powerful yet," Ren added in a lengthy front-page interview with the People's Daily last week. Still, there is "no need to worry" about the US restrictions, he insisted. By bundling Huawei's chips together, or so-called clustering, they can still match rival offerings from top global players.

These comments, which have garnered international headlines and gone viral at home on Weibo, appear to be at odds with each other. But the reality is that both things can be true at once. They expose a critical crossroads for Chinese AI as competing interests vie to control its fate in the long run. Understanding this is especially crucial at a time when export controls are on the negotiating table in trade talks.