The U.S. government plans to buy a stake in either Ericsson (NASDAQ: ERIC) or Nokia (NYSE: NOK) as a way to counter Huawei. Attorney General Bill Barr floated the idea to combat against Huawei after speaking to an audience in Washington on Thursday.
"Our economic future is at stake," Barr said in a speech delivered during a conference in Washington on threats that China poses to the United States. "The risk of losing the 5G struggle with China should vastly outweigh other considerations."
The concern is that Huawei's current advantages mean that the U.S. will fall behind as the rest of the world advances with 5G next generation networks or companies will opt to pay for Huawei's equipment to keep pace.
"There have been some proposals that these concerns could be met by the United States aligning itself with Nokia and or Ericsson through American ownership of a controlling stake either directly or through a consortium of private American and allied companies," Barr said.
The U.S. is considering numerous approaches to fight against Huawei's dominance. Lawmakers have drafted a bill to fund domestic alternatives to Huawei, while the White House is pushing U.S. telecom and technology companies to agree on common engineering standards that would allow 5G software developers to run code atop machines that come from nearly any hardware manufacturer.
However, Barr dismissed this plan. "This is just pie in the sky," he said. "This approach is completely untested and would take many years to get off the ground, and would not be ready for prime time for a decade, if ever."
Barr's new suggestion is an odd one. Due to the fact it is not the role of the Department of Justice to direct policy related to communications networks. Regardless, Barr is suggesting that a faster way to compete with Huawei would be to fund Ericsson and Nokia, both of which are Huawei's biggest competitors on the global market.