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Attorney general suggests US take stake in Ericsson, Nokia to counter Huawei

The US is very worried about China's potential to dominate in 5G.

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Attorney General

US Attorney General William Barr suggests a way for the US to compete with Huawei. 

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The race for 5G goes beyond just faster download speeds for the average phone user. Concerned about Chinese tech companies such as Huawei taking the lead on the next-generation wireless technology, the US attorney general says the United States should take a stake in foreign tech companies to compete. 

Attorney General William Barr proposed that the US could take a "controlling stake" in Finland's Nokia or Sweden's Ericsson to counter Huawei's 5G dominance. He suggests this could be done directly by the US or through a consortium with allies. 

"Putting our large market and financial muscle behind one or both of these firms would make it a far more formidable competitor and eliminate concerns over its staying power, or their staying power," Barr said at the China Initiative Conference held at the Center for Strategic and International Studies on Thursday.

In a statement, Nokia said it always welcomes investor interest, but couldn't comment on Barr's remarks. Ericsson declined to comment.

One key consideration with 5G, Barr said, is the development of better AI.

"As China captures more and more of the data generated by its 5G infrastructure, it can produce better artificial intelligence because that is what artificial intelligence learns from," he said. "The more data, the better the AI."

Huawei is one of the leading manufacturers of networking gear, including 5G equipment, used by telecommunications companies around the world. It also had a commanding 37% of the 5G phone market share in 2019, when the first 5G phone networks started to go into service.

Last month, in a controversial decision, the UK granted Huawei permission to build certain noncore parts of the country's 5G infrastructure.

Also last month, US senators proposed a bill for more than $1 billion in subsidies to enhance research and development of 5G. 

The US Department of Justice didn't immediately respond to a request for comment.

Originally published Feb. 7 at 6:52 a.m. PT. 
Update 7:19 a.m. PT : Adds Nokia comment and background details. 7:56 a.m. PT: Adds Ericsson response.

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