On October 18, 2025, Huawei's internal disciplinary committee reportedly imposed strict penalties on senior executives within its cloud computing business unit after uncovering "data falsification and economic misconduct." Zhang Ping'an, Executive Director and CEO of Huawei Cloud Computing BU, was demoted three levels, given the largest possible pay cut, and issued a severe warning — a rare move that underscores the gravity of the offense.
Bruno Zhang (CTO of Huawei Cloud), Jacqueline Shi (president of Global Marketing and Sales Service), and Kang Ning (president of Huawei Cloud Global Ecosystem) were each demoted two levels for inadequate management oversight. The collective punishment highlights that Huawei Cloud's problems are rooted not in product shortcomings but in internal control and governance failures.
Integrity crisis tests Huawei's iron discipline
Renowned for its rigorous corporate discipline and procedural precision, Huawei has been shaken by the word "falsification" entering its internal lexicon, once thought unthinkable within its highly structured operations. Unlike its telecoms core, the cloud business is capital-intensive, long-horizon, and complex to measure in real time, making it especially prone to managerial opacity.
Huawei Cloud has been considered one of the group's most promising growth drivers. According to its 2024 annual report, the unit posted revenue of CNY38.52 billion (US$5.4 billion), marking an 8.5% year-over-year increase. By the first quarter of 2025, Huawei Cloud commanded an 18% share of China's cloud market, firmly in second place behind Alibaba Cloud.
IDC data indicates that Alibaba Cloud held a dominant 23% share of China's AI IaaS market in 2024, which is more than the combined share of its next two rivals, while Huawei Cloud trailed at 10%. The disparity has continued to widen amid intensifying competition in AI-centric cloud infrastructure.
Performance pressure fuels data manipulation
Industry observers believe certain Huawei Cloud divisions may have exaggerated performance data to close the gap with Alibaba Cloud or sustain growth expectations, often reporting results before actual delivery. These short-term tactics likely triggered the falsification scandal now under scrutiny.
Huawei Cloud's real challenge lies not in growth scale but in growth quality.
Key questions linger:
➤ Is its user base structurally sound?
➤ Do its computing metrics truly reflect service capacity?
➤ Is revenue recognition consistent with actual usage?
When internal incentives stray from these fundamentals, inflated performance and hidden losses inevitably follow.
Zero-tolerance stance drives transparency shift
According to Chinastarmarket.cn, The Paper, and TMTPost, industry sources stressed the firm's zero-tolerance stance on data falsification. Founder Ren Zhengfei reportedly regards the disciplinary action as a standard internal governance measure. The company has since initiated a sweeping rectification campaign across its cloud division, with multiple staff reshuffles already in progress.
Industry analysts note Huawei's anti-corruption approach is shifting in two key ways:
1. From isolated disciplinary cases to systemic governance — addressing root structural flaws rather than one-time breaches.
2. From opaque internal notices to public disclosure — making disciplinary measures visible to deter misconduct and demonstrate reform intent.
Veteran executive faces reckoning
The disciplinary action against Zhang Ping'an — a Huawei veteran since 1996 who has held senior roles across telecom software, cloud services, and enterprise operations — serves as both a punishment and a warning. Though he has spearheaded Huawei Cloud's initiatives in AI cloud, embodied intelligence, and AI agent technology, the company's culture prioritizes performance authenticity above all else.
Huawei Cloud Computing BU Executive Director &CEO, Zhang Ping'an. Credit: Huawei
Signs of internal upheaval were already visible. On August 22, 2025, Zhang issued an internal restructuring order that merged or dissolved dozens of sub-departments, affecting thousands of employees. The overhaul established Huawei Cloud's new "3+2+1" framework: three foundational layers (general computing, intelligent computing, storage), two platform layers (AI PaaS and databases), and one security core.
While publicly framed as a strategic realignment, the move also signaled Zhang's effort to consolidate resources, simplify structure, and enhance operational efficiency. It represents a crucial turning point as Huawei Cloud re-examines its business model and shifts focus back to integrity and sustainable growth.
Article edited by Jerry Chen
