The U.S. Defense Department is urging American telecom equipment makers to develop open-source 5G software and provide a homegrown alternative to China's Huawei Technologies Co. Ltd., the Financial Times reported.

Lisa Porter, who oversees research and development at Defense, has warned American companies that they risk becoming obsolete if they do not comply with the request, according to the report.

Making 5G tech open-source could threaten American companies such as Cisco Systems Inc. or Oracle Corp., the paper reported. The open-source technology would allow telecom carriers to buy hardware from different vendors, rather than custom systems devised by specific companies.

"I think those that drag will ultimately have to come along," Porter told the FT. "It is just like any other historical trend — the classic one being Kodak, which invented digital cameras but then didn't leverage them."