In the midst of an economically uncertain time in China stemming from the trade war with the U.S., Xiaomi said it will invest at least 10 billion yuan ($1.5 billion) in artificial intelligence and Internet of Things (IoT) smart devices over the next five years.
Bloomberg reported that the investment is part of the company’s plan to get more revenue from high-value services. Lei Jun, co-founder of the Beijing-based company, said it was also going to pursue expansion into Europe, and is taking action despite the current economic uncertainty.
“Now is the time for the action. We are all in on AIoT,” Lei said, referring to a combination of AI and the family of connected devices that make up the Internet of Things (IoT). He didn’t give specific details on the investment, however.
Global demand for smartphones has evened out and Xiaomi wants to make sure revenue keeps coming in, although the company expects demand to rise again once 5G wireless is introduced. Xiaomi was once a company expected to be worth $100 billion, but its current value is about one third of that, Bloomberg reported. Xiaomi stock is down 40 percent from its initial offering price in July.
Xiaomi is no stranger to the idea of advancement. Recently, the company announced plans to have 5,000 stores open in India by the end of the year.
“It’s been over a year since we started offering our products through offline retail, and we have seen strong growth there,” said Manu Kumar Jain, Xiaomi vice president and managing director for India, according to CNBC. “Offline retail is a huge segment in our country, with nearly 40 percent of the offline market focused in rural regions, and all of this should increase our offline sales and account for 50 percent of the company’s revenue by the end of next year.”