Xiaomi ‘in no rush’ to turn vast AI spending into profits despite earnings slump

Xiaomi reported a 20.3% year-on-year drop in net profit to 9.46 billion yuan for the second quarter, its third consecutive quarterly decline, while revenue fell 6.1% to 108.9 billion yuan. The company's CFO Alain Lam said Xiaomi is 'in no rush' to monetize its AI investments, which accounted for nearly 30% of its 18.2 billion yuan R&D spending in the first half, up 25.6% year on year.

Xiaomi ‘in no rush’ to turn vast AI spending into profits despite earnings slump The Chinese tech firm has seen its net profits decline for three consecutive quarters, as it rapidly ramps up AI-related R&D spending Chinese technology giant Xiaomi has said it is “in no rush” to convert its large investments in artificial intelligence into profit, after recording another decline in net profits in the second quarter amid intense competition and cost inflation. “Our investment in AI is currently still in a phase of large-scale input. However, as a large corporation, Xiaomi is in no rush to pursue immediate monetisation,” said Alain Lam, the firm’s vice-president and chief financial officer, during an earnings call on Tuesday evening. market concerns rise https://www.scmp.com/business/china-business/article/3363131/chinese-fund-managers-pursuit-ai-plays-backfires-hot-tech-stocks-wobble?module=inline&pgtype=article over whether the investments will generate sufficient returns. In the first half of the year, Xiaomi’s spending on research and development jumped 25.6 per cent year on year to 18.2 billion yuan US$2.7 billion , with AI-related inputs accounting for nearly 30 per cent of the total, Lam said on Tuesday. “The prices of memory are still high and the competition remains fierce. But the short-term pressure will not change our strategy for the long run,” said Lu Weibing, partner and president of Xiaomi, during the call. smartphone and electric vehicle maker https://www.scmp.com/tech/big-tech/article/3354556/how-xiaomis-push-ai-chips-and-evs-future-proofing-its-hardware-empire?module=inline&pgtype=article reported that its revenue for the April-June period had fallen 6.1 per cent year on year to 108.9 billion yuan. Its net profit also slumped for the third consecutive quarter, dropping 20.3 per cent year on year to 9.46 billion yuan.