Xiaomi Places a $1.5 Billion Bet on AI and Smart Devices

Xiaomi will invest at least 10 billion yuan ($1.5 billion) on AI and smart devices over the next five years, according to Bloomberg.

The investment is part of the company’s strategy of wringing more revenue from high-value services and the IoT, co-founder Lei Jun said in a statement. The company is also focusing on pushing upmarket while expanding into Europe, Lei told Bloomberg Television. Xiaomi’s taking action against the backdrop of a brewing trade war that’s stoking global economic uncertainty, he added.

“Now is the time for the action. We are all in on AIoT,“ Lei said, referring to the combination of AI and the so-called ecosystem of connected devices known as the Internet of Things. He didn’t elaborate on details of his investment plan.

Xiaomi is looking to diversify its revenue as demand for smartphones globally plateaus, though it expects demand to bounce back with the advent of super-fast fifth-generation wireless. Once touted as an internet company that can command a value of as much as $100 billion, Xiaomi is now worth roughly a third of that. Its stock is down roughly 40 percent from its July initial public offering.