Huawei Restructures Cloud Unit to Focus on AI Profitability

 

Huawei has initiated a major restructuring of its cloud computing division to sharpen its focus on artificial intelligence, according to company sources and Chinese media reports.

The reorganization, announced internally by Zhang Pingan, CEO of Huawei Cloud, involves the merger of several departments and the reallocation of resources toward AI-related businesses, including AI model development, data center solutions, and cloud services. The restructuring will reorganize operations into six core areas—computing, storage, database, and cybersecurity, among others. While the exact number of affected employees is unclear, some staff may be offered internal transfers.

Key Highlights

• Huawei restructures cloud unit to prioritize AI services
• Cloud business reorganized into six key areas
• Move targets profitability after reported 2024 losses

This strategic pivot follows reported losses in Huawei’s cloud unit last year and is aimed at achieving profitability. Despite Huawei’s strong financial position and consistent investment of 10–15 percent of its annual revenue in R&D, the cloud business has proven difficult to sustain profitably due to high infrastructure costs and the need for scale.

Industry experts suggest that Huawei’s decision reflects a broader challenge across global cloud providers, where profitability is elusive without massive economies of scale. By shifting focus to higher-margin services and AI-driven innovation, Huawei is positioning itself for growth in an area less vulnerable to US restrictions.

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Huawei’s restructuring also builds on its strength in telecommunications infrastructure and patents, especially in 5G, while channeling resources into AI opportunities where it can maintain a competitive edge. The move underscores how global tech companies are realigning strategies amid international trade and regulatory pressures.