Huawei Trial Tests Trump-Xi Thaw as AI Theft Allegations Pile Up

The U.S. Justice Department this month brought its landmark criminal case against Huawei Technologies to trial in a Brooklyn federal court. Prosecutors allege the telecom conglomerate ran a two-decade "culture of crime" that stole intellectual property from T-Mobile, Cisco, and Motorola.

The charges landed the same month President Donald Trump hosted Chinese President Xi Jinping at a state dinner aimed at signaling rapprochement. The sequencing shows how hard the U.S.-China thaw will be to execute.

How deep is the trust deficit?

The Huawei indictment was not the only September escalation. On Sept. 9, the NSA, FBI, and CISA issued a joint advisory accusing six Chinese AI firms of "industrial-scale" theft of trade secrets from Anthropic, OpenAI, Google, and xAI.

The friction runs both ways. Chinese leaders told Fortune's Diane Brady that geopolitical uncertainty has made them less inclined to invest in America. China's total overseas investment climbed 11% to $214 billion last year, keeping it the No. 2 source of global capital behind the United States. Yet direct investment in the U.S. plunged 71% to $1.9 billion.

Who sat at the head table?

Trump's state dinner for Xi read like a Nasdaq roster. Nvidia CEO Jensen Huang and AMD CEO Lisa Su were seated at the head table alongside Apple's Tim Cook and Tesla's Elon Musk. OpenAI's Sam Altman and Meta's Mark Zuckerberg sat nearby. Anthropic CEO Dario Amodei was conspicuously absent.

Every CEO at the dinner faces tariffs, export controls, or both. The gathering produced one concrete deliverable: a U.S.-China AI safety channel modeled on the Washington-Moscow hotline that defused Cold War crises.

The deal came days after Alibaba unveiled a powerful new AI chip, sharpening competition in the very sector both governments now want to police.

Why are Americans warming to Chinese goods?

Product bans have kept most Chinese consumer brands out of the U.S. market. Americans cannot buy a BYD Seagull, the world's bestselling electric vehicle, which starts at around $8,000. They cannot access WeChat's super-app integration or the latest Chinese humanoid robots.

But attitudes are shifting. Pew Research found Americans' views of China have warmed as global perceptions of the United States have cooled. Canada moved first. Prime Minister Mark Carney let BYD into the Canadian market after what Brady called Washington's "dumb trade war" with Ottawa.

Chinese platforms are also pulling in U.S. small businesses. Alibaba.com now serves roughly 10 million small business users on its AI-powered Accio Work platform.

"Our mission is to make it easy to do business anywhere," Alibaba.com CEO Kuo Zhang told Brady earlier this month. Achieving that means building trust and providing "flexible and agile support for their supply chains … tariffs are only one factor to consider."

What comes next for the thaw?

The Trump-Xi optics signal warmer relations, but the Huawei trial, the joint intelligence advisory, and the $1.9 billion direct-investment floor show the structural obstacles remain. The AI safety channel gives both governments a venue to defuse incidents, but it covers one slice of a relationship spanning semiconductors, EVs, biotech, and capital flows.

If U.S. carriers keep blocking Chinese handsets and Congress keeps Huawei on the entity list, the thaw will remain a headline rather than a balance-sheet event.