Did an AI Security Breach Pull Huawei Into a Military Investigation?

So in the early hours of September the 11th, a screenshot began circulating showing an internal Huawei conversation. According to the screenshot, Huawei chairman, Liang Hua, had been unable to contact CEO Ren Zhengfei for two straight days. His daughter, who is the CFO, Meng Wanzhou, his wife and his younger daughter, Annabelle, had all disappeared as well. And then the story became even more detailed. Surveillance footage supposedly showed a convoy of vans leaving their residence at around one o'clock in the morning on September the 11th. The vehicles reportedly headed toward Shenzhen's Dapeng Peninsula and then disappeared. Now, the Dapeng Peninsula is right on the coast, and that was all the internet needed. Almost immediately, people began saying Ren Zhengfei has escaped. He left by sea. Now, another version claimed that while Xi Jinping was visiting India, Ren and his family had left China from Shenzhen's coast, sailed into international waters, and made their way to a privately owned island. The rumor even claimed the island belonged to the Ren family, had its own airport and harbor, and was slightly smaller than the size of Singapore. Very quickly, the entire Chinese internet was buzzing. So how much of this is actually true? Let's keep going. On September the 14th, Ren Zhengfei's younger daughter, Annabelle, Annabelle Yao, made a very public appearance at a launch event in Beijing for Youku's reality program. A number of major Chinese media outlets covered the event extensively. Pictures of Yao at the event were posted on social media. The message seemed fairly obvious. Stop speculating, everyone. The Ren family is fine. His daughter just appeared. But that didn't stop the rumor. So people quickly point out a problem. Annabelle is not part of Huawei's management team. She is an entertainer. So the fact that she remained in Beijing doesn't tell us whether her father or her half-sister are free, or what their current situation is. And Yao's appearance can challenge the claim that entire family escaped. But it cannot tell us whether Ren Zhengfei and Meng Wanzhou are safe, free, and conducting business as usual. Now, Ren Zhengfei is Huawei's CEO, and he's been holding that position since 1988. And his daughter, Meng, is the deputy chairwoman and CFO. So far, neither of them has publicly appeared in a picture or a video, which can quickly put the rumors to rest. And that's what people really cared about. Is the founder still in charge? Is Huawei still operating according to his wishes? But the most unsettling part is Huawei's famously aggressive legal and PR machinery. This time, it has gone almost completely silent. Most people who follow Huawei know how quickly the company usually reacts. Whenever something online is seen as mocking Huawei, damaging its reputation, or targeting one of its executives, the usual response is fast. Complaints, takedown requests, and an official rebuttal. Just look at the record. In early September, 2023, a rumor circulated online claiming that the US had invited Ren Zhengfei to attend a meeting in America. Huawei responded within a day or two, and publicly rejected the story. Then on February 7th, 2024, another document appeared online, supposedly containing remarks by Ren Zhengfei at a Huawei conference. Huawei moved even faster this time. In less than 24 hours, the company had publicly called it fake. And Huawei doesn't only react to rumors. Even online jokes can trigger a response. The recent example is the bamboo shakira controversy. Huawei later acknowledged filing complaints against a large number of online posts that they said were mocking, distorting, or defaming the company and its executives. And many people's posts were banned. They were taken down. The rumor that Huawei's founder and his family had fled China began spreading around September the 11th. Seven days have now passed, and yet Huawei has not responded the way it normally does. No direct rebuttal, no public appearance by Ren Zhengfei himself, and no obvious attempt to shut the story down. And you wonder why. Now, there's several possible reasons. The first is that this may have moved beyond the level of an ordinary corporate rumor. If the matter touches national security or higher-level political concerns, then Huawei's own legal or PR departments may not have the authority to define the situation publicly without receiving instructions from above. In other words, they can't do anything unless they are being instructed to. And the second possibility is simply that perhaps Huawei concluded that attacking the rumor would only make people more suspicious, because the harder you try to suppress something, the more attention you bring to it. And then there's a third possibility, and this one is the most troubling one. Perhaps Huawei simply cannot produce the person everyone wants to see. Yesterday, an X account focused on China news dropped a bombshell on Ren Zhengfei, Huawei's founder, and this is what it claims. It says, because of AI-related leaks, especially leaks involving military secrets, many executives at high-tech companies have been detained. These high-tech firms were using American chips and computing power, while the Chinese military apparently did not know and believed the chips and computing resources were domestically developed. As a result, a large amount of classified information was allegedly leaked. The claim that Ren and his entire family fled the country was supposedly leaked by company insiders as a way to pressure the authorities to release him or them. The post went on to offer some opinions. It says, Ren Zhengfei is considered part of Xi Jinping's camp, so if the military really detained him, it will be a major slap in the face to Xi Jinping. Of course, this is a comment, right? This is a comment involving CCP's internal political struggle. So according to this story, Huawei's founder is detained by the military for his failure in securing classified AI and military information, and somehow the move is entangled with CCP's internal political struggles. And then also yesterday, a Chinese YouTuber who goes by the name Li Dayu also shared a tip from one of his viewers, and his revelation corroborates with the previous one, the one that I told you about. The message claimed that Ren Zhengfei did not flee China. Instead, Ren may have been caught up in a major military secrets or a military leak involving China's AI industry. According to the tip, a number of people connected to the case have already been taken in for investigation, and Ren Zhengfei is one of them. So now we have two sources saying essentially the same thing. Basically, Huawei is involved in an AI leak that exposed PLA's secrets. So what kind of AI leak could possibly be serious enough to drag in someone as politically connected as Ren Zhengfei? Remember a week ago, that was September the 10th, Anthropic released a report, a threat intelligence report on September the 10th. The report accused Chinese AI companies of using large numbers of fake accounts, overseas proxy servers, and intermediary platforms to gain large scale access to Anthropic's cloud models. It named seven major Chinese AI companies, and here they are. In simple terms, the accusation is that these companies were routing requests through overseas accounts. A user in China would type a question into what appeared to be a Chinese AI service, but behind the scenes, that request could be forwarded to Anthropic's AI model, and cloud would generate the answer, and the result would then be sent back to the user in China. But if this were only a matter of commercial free writing or copying technology, it wouldn't be enough to trigger a national security panic in Beijing. The much worse scenario would be the data being sent out. So one user believed to have PLA connections uploaded video from hundreds of surveillance cameras in Chengdu to an American AI system in order to analyze a particular target. Some of those cameras were set to include views from views around sensitive PLA facilities. Other material allegedly sent to US-based systems include internal code from engineers at major state-owned companies, active logging credentials, confidential police case management information, and detailed information from internal AI projects at several Chinese tech companies were also leaked. So it looks like a major national security breach. As a result, Chinese authorities are allegedly conducting an internal review to determine how much sensitive information from the military, police, design institutes, and other organizations may have been sent into American AI systems over the past two years. Now, anyone who has actually read Anthropic's report will notice something important. Huawei is not directly named. So what does any of this have to do with Huawei? The argument is that Huawei sits at the center of China's domestic AI infrastructure. Its Ascend chips have become one of the most important sources of AI computing power in China. And some estimates put Huawei's share of the domestic AI accelerator market at roughly 50% to 62%. And when DeepSeek first began attracting major attention, it was also running workloads on Huawei Cloud using Ascend computing infrastructure. Now think about how an investigation like this might unfold. Authorities begin with the software side, companies such as DeepSeek. Then they follow the technical chain downward into computing infrastructure, cloud services, and network architecture. Eventually, that investigation or that chain could lead to Huawei. And so from that perspective, it would not be surprising if Ren Zhengfei was asked to, quote unquote, assist in investigation or explain certain situations, especially given his political role inside the company. And that may explain why Mr. Ren suddenly disappeared from public view. Now, I want to talk about the timing of this. This occurred at a very sensitive time. The first came on September the 9th when the criminal case against Huawei went to trial in federal court in New York. The US Justice Department had been preparing this case for eight years and prosecutors accused Huawei of a range of misconduct involving alleged theft of American technology, misuse of American financial system, racketeering-related activity, and unfair business practices. And of course, Huawei denies wrongdoing. And there's the issue of, the main issue with this case is Ren's daughter, Meng Wanzhou, who is Huawei's CFO, she returned to China in September 2021 as a national hero after reaching a deferred prosecution agreement with the US prosecutors. Remember, she was detained in Vancouver at the request of US prosecutors. Although the US government dropped the personal charges against her in 2022, after her deferred prosecution agreement ended, she had earlier signed a four-page statement, a four-page statement of facts as part of that agreement. And a US judge has now allowed that statement to be used as evidence in the case against Huawei. So in a nutshell, something that Ms. Meng signed years ago has now become part of the prosecution's case against the company. And that raises an uncomfortable question about Ms. Meng's political status in China. Is she still a national hero? And under this kind of international legal and financial pressure, does Beijing still perceive the father and the daughter, the father-daughter duo, as national champions? Or could they become liabilities if the political cost becomes too high? That's the kind of pressure that naturally creates lots of speculation. And then there's the second sensitive moment. The expected Trump-Xi Jinping meeting is on September the 24th, and it will be followed by the party's fifth plenum in October. All of this, both events will take place amid intense internal power struggles. And Huawei has never been viewed as an ordinary private company by anyone, whether outsiders or insiders. So questions about its ties to the Chinese state, the military, and the security system have followed the company for years. So look at the timing. Just as Xi Jinping is preparing for important talks with the US, Huawei goes on trial in New York. Then rumors suddenly explode across the internet, claiming that its founder and his family have fled the country. And instead of immediately putting Ren Zhengfei in front of a camera and killing the rumor, Huawei remained silent. So political commentators argue that this could reflect deeper political maneuvering inside Beijing. Their theory is that someone may be using the Huawei story and uncertainty surrounding Ren Zhengfei to complicate Xi Jinping's diplomacy or diplomacy effort with Washington in the coming week, and therefore weaken his authority at home. Did Ren Zhengfei actually flee China? And at this point, whether he has fled China may no longer be the most important question. The bigger question is what Huawei's silence is telling us. Because the question right now isn't where is Ren Zhengfei. The question is, and I think the question the company fears is when people ask what happens to China's Huawei if Ren Zhengfei and Meng Wanzhou are both out of the picture. And perhaps that's what this entire Huawei mystery is really about. Thank you so much for watching. If you're new here, please hit subscribe. Don't forget to give my video a like. If you want me to answer your questions directly, please join my live every Tuesday, Thursday, and Saturday at 9 p.m. Eastern time. I'd love to chat with you there.