Recently, the business world has been staging an absurd "money-grabbing contest."
The AI track has become the latest carnival. A large number of companies are pouring in, burning cash on large models, grabbing computing power chips, betting on the "next explosion point," hoping to double their investment overnight. For example, Seres's semi-annual report showed that due to heavy R&D investment, profits plummeted 48% year-on-year, and the capital market immediately turned bearish, with investors voting with their feet.
At the same time, Huawei's 2026 financial report showed that 21% of revenue continued to be poured into R&D, even forcing a brand new technological path in the blocked semiconductor business.
Interestingly, when these three sets of images are placed together, a sharp question emerges: Why are some companies eager to make money quickly, while others are determined to invest money, preferring to earn small profits and get rich slowly?
The answer lies in Ren Zhengfei's three-decade-long choices.
Ren Zhengfei's business philosophy can be condensed into six words: "Deep Dredging, Low Weir."
These six words were not invented by Ren Zhengfei; they come from the water management principles of the Dujiangyan irrigation system built by Li Bing and his son more than 2,000 years ago. In April 2009, Ren Zhengfei delivered a speech at an internal Huawei commendation conference, officially introducing this ancient wisdom into corporate management.
He said it very bluntly:
Later, Article 11 of the "Huawei Basic Law" was written in black and white: "We will set reasonable profit rates and profit targets for each period according to the requirements of sustainable growth of our business, rather than simply pursuing profit maximization."
The most popular saying in society is "pursue maximum corporate profit margin," but Ren Zhengfei said: Huawei's pursuit is the opposite. He also made a down-to-earth analogy — "Wang Xiaoer sells tofu." The cost of tofu is fixed, and the profit margin is limited. You can't earn too much, nor too little. Collect what is due, and collecting even a penny more is greed.
The core of this philosophy is actually one sentence: Do not pursue excessive profits, only retain reasonable and meager profits, leave the extra space to customers and suppliers, and invest the vast majority of revenue in R&D and talent development.
So, why is Ren Zhengfei convinced that "earning small profits" is the foundation of survival? Because he has witnessed the price of excessive profits with his own eyes.
In 1992, Shenzhen's air was filled with the smell of money. The Shenzhen Stock Exchange was right downstairs from Huawei's headquarters. Every morning, the entrance was surrounded by layers of people — buying stocks, speculating, cashing out — everyone's face read one word: get rich overnight.
But the Huawei office upstairs was as quiet as a study room.
Ren Zhengfei later recalled: "At that time, the exchange downstairs was surrounded by layers of stock buyers. Upstairs, we were as calm as water, all working."
He rejected all suggestions to go downstairs to make quick money, and instead poured the money into R&D. This was not because he was noble, but because he had seen how dangerous excessive profits can be.
At the beginning of Huawei's entrepreneurial period, it was engaged in trading, acting as an agent for Hong Kong companies' switches. But when Hong Kong saw Huawei selling well, they stopped supplying. Huawei was choked and faced a crisis. Ren Zhengfei slammed the table and decided to do it himself.
At that time, Huawei had little money, and developing digital switches required huge funds. Ren Zhengfei borrowed money at high interest rates of 20% to 30%. He said to his executives:
In 1993, Huawei's self-developed C&C08 digital program-controlled switch was born. The first unit was installed in Yiwu, Zhejiang, but it was very unstable and full of problems. The R&D team was divided into two shifts, working 24-hour shifts, moving the development battlefield directly to the telecom bureau, and it took more than two months to complete. Witnesses later recalled: "If that failure had happened, there would be no Huawei today."
Ren Zhengfei clearly knows: Excessive profits attract speculators, while meager profits filter out long-termists. If an industry is rife with excessive profits, capital will flood in, leading to internal competition, price wars, and quality degradation. Excessive profits never last. Actively choosing to earn small profits and maintain low margins actually raises industry barriers, discourages speculators who only want quick money, and protects the long-term survival base.
Huawei was able to practice this philosophy because it was forced by the brutal competitive environment.
Before Huawei became a success, the real "big brother" in China's telecommunications industry was Julong Telecom. In 1991, Julong developed the country's first independently developed large-capacity program-controlled switch, the 04 machine, which Vice Premier Zhu Rongji named the "Chinese Pride Machine." In 1995, Julong held 14% of the domestic switch market share, making it the leader among the "Giant China" group (Julong, Huawei, ZTE, Datang). At that time, Huawei was just a junior following Julong.
But Julong had a fatal problem: its core product was licensed to several factories, each operating independently. To grab orders, they undercut each other and engaged in vicious competition.
On New Year's Day 1996, more than a dozen operating 04 machines suddenly failed simultaneously, causing large-scale communication network disruptions. Julong's internal factions worked against each other, and the problem was not solved quickly. It was ordered to suspend operations for seven months for rectification. During those seven months, Huawei and ZTE aggressively grabbed market share. When Julong finally came back, the market had changed. In 1998, Huawei's sales reached 8.9 billion yuan, ZTE 4 billion, and Julong only 3 billion. As the core military technical personnel withdrew, Julong never recovered.
The lesson from Julong is intuitive: When the market is booming and sales are soaring, companies easily fall into a frenzy of chasing short-term high profits, neglecting product quality and core technology. Once the tide recedes, short-sighted greed will cause the company to collapse instantly. Julong failed not because of technology, but because of organizational fragmentation and excessive pursuit of short-term gains.
Huawei's choice is exactly the opposite. For more than 30 years, Huawei has only charged at one "city wall" — communication. Every year, it invests billions in R&D, regardless of how much it earns or how attractive external temptations are.
This choice is almost unimaginable in the face of capital logic.
In the capital market, investors pursue bright quarterly earnings; in the startup circle, founders chase high valuations in Series A and B rounds and quick cash-outs. Everyone wants to make quick money, big money.
In 2000, the real estate market was booming. Various big players were entering the game. A friend suggested to Ren Zhengfei: "Mr. Ren, let's go into real estate together. Just get a piece of land, develop it, and we'll make tens of billions in profit. Isn't that much better than Huawei?"
Ren Zhengfei refused again. People gossiped behind his back, saying he was not smart enough, calling him "Ren the Fool."
In 2010, at an internal Huawei meeting, a senior executive suggested diversifying into real estate and internet. Ren Zhengfei slammed the table:
In 2016, on CCTV's "Dialogue" program, he was asked why Huawei had not gone public for 28 years. He answered bluntly:
In 2019, when Huawei was at the center of US sanctions, the Wall Street Journal interviewed Ren Zhengfei and asked a sharp question. He said:
This sounds like self-mockery, but it is actually his true choice for three decades.
So, what supports Huawei's "counter-intuitive" persistence?
The answer is: profit-sharing mechanism.
Ren Zhengfei distributed more than 98% of the shares to employees. Starting with the employee stock ownership plan in 1990, by 2024, over 200,000 employees are almost all shareholders. The Wall Street Journal once questioned Huawei's shareholding structure, but Huawei has come this far — distributing profits, spreading benefits, and then everyone works together with full dedication.
Ren Zhengfei has an old saying: "When wealth is shared, people gather; when wealth is hoarded, people scatter." When money is shared, people stay. When people stay, things get done.
This is Huawei's most core institutional design: binding everyone through shared interests, making everyone no longer just an employee but a partner who shares risks and rewards. When a company's profit distribution mechanism is reasonable enough, employees are naturally willing to follow the long-term path, rather than thinking about cashing out after two years.
In 2015, Huawei released a corporate image advertisement called "Ballet Feet." The image shows one foot wearing an elegant ballet shoe, graceful and glamorous, while the other foot is bare, covered with scars and calluses. The caption reads:
When Ren Zhengfei saw this ad, he said: "Isn't this exactly Huawei's true portrayal? I think this is Huawei people — painful and joyful!"
This ad never appeared on any TV station or any outdoor billboard. It was only sent to internal employees and corporate clients. But it expresses the truest essence of Huawei's three decades.
Back to 2026. When Huawei once again broke through in the chip field using the "τ-law," when Seres' profit was cut in half due to soaring R&D investment and the market turned bearish, when countless companies are still chasing short-term profits in the AI track — we finally see the ultimate path of "slow wealth."
Ren Zhengfei is not foolish; he just sees farther than anyone else. He rejected the excessive profits downstairs in 1992, the real estate frenzy in 2000, and the entanglement of capital, ultimately gaining Huawei's confidence to survive cycles.
Earning small profits is the foundation of survival; getting rich slowly is the ultimate destination.
All lasting wealth that stands the test of time is never an overnight explosion, but is built by countless solid small profits and countless days and nights of deep cultivation.
You can be slow, but you cannot stop. You can earn less, but you cannot be greedy for more. You can walk slowly, but you must go far.
