Xiaomi reports a decline in second-quarter net profits while maintaining heavy spending on artificial intelligence research and development.
Key facts
- •Xiaomi's net profit dropped 20.3 percent year-on-year to 9.46 billion yuan in the second quarter.
- •Research and development spending reached 18.2 billion yuan in the first half of the year.
- •AI-related inputs accounted for nearly 30 percent of the company's total R&D expenditure.
- •Quarterly revenue fell 6.1 percent to 108.9 billion yuan compared to the previous year.
- •The company has experienced three consecutive quarters of declining net profits.
Chinese technology company Xiaomi stated it is not prioritizing immediate monetization of its artificial intelligence investments. The announcement followed the company's report of a 20.3 percent decline in net profit for the second quarter, marking the third consecutive quarter of falling profits amid rising competition and costs.
By the numbers
Investment Strategy and R&D Spending
During an earnings call on Tuesday, Xiaomi vice-president and chief financial officer Alain Lam noted that the company's AI investment remains in a phase of large-scale input. In the first half of the year, Xiaomi's research and development spending increased by 25.6 percent year-on-year to 18.2 billion yuan, with AI-related costs representing nearly 30 percent of that total.
Financial Performance and Market Pressures
Xiaomi reported that revenue for the April-June period fell 6.1 percent year-on-year to 108.9 billion yuan. Lu Weibing, partner and president of the Beijing-based firm, cited high memory prices and fierce market competition as factors contributing to short-term pressure, though he stated these challenges would not alter the company's long-term strategy.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by SCMP Business.
