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(Bloomberg) -- Honor Device Co., one of China’s biggest smartphone makers, plans to invest $10 billion over the next five years to become a contender in the artificial intelligence race.
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The Shenzhen-based company, which got its start as a spinoff from Huawei Technologies Co., announced a new corporate strategy that centers on building a device-centric AI ecosystem at Mobile World Congress. The funds for its investment push will come from the company and its investors, an Honor representative said, without providing further details. Honor’s biggest backers are local government entities and it also has display maker BOE Technology Group Co. and two of China’s mobile carriers among its investors.
Newly appointed Chief Executive Officer James Li, flanked by representatives from partners Qualcomm Inc. and Alphabet Inc.’s Google, set out the company’s plan at the mobile industry’s biggest gathering in Barcelona on Sunday. Honor didn’t specify what it will spend the money on, apart from saying it’ll collaborate with global supply chain and carrier partners, like Orange and Telefonica, to co-create “a new paradigm for AI devices in the agentic AI era.”
Honor joins a rush toward AI across industries, which has been especially pronounced in China following the breakthrough debut of DeepSeek’s reasoning chatbot. The country’s major internet companies, from Alibaba Group Holding Ltd. to Tencent Holdings Ltd., have accelerated updates to their AI models and started measuring themselves against the startup’s software. Honor aims to play a role in the contest for users by taking the device as its starting point.
The company’s approach is also distinctive for its close collaboration with US partners. Honor works with Google Cloud on the development of its AI agent and is integrating Google’s Gemini deeply into its phone software. At MWC, the company also introduced a Windows-powered AI PC in the MagicBook Pro 14, adding to its collaboration with Microsoft Corp.
Questions persist about the monetization potential of new AI technologies and chatbots, with several companies betting on the technology to primarily drive upgrades of hardware. Samsung Electronics Co. made a big push in that direction last year, alongside Apple Inc. with the launch of Apple Intelligence on the iPhone 16. Honor’s effort will have to measure up against those ventures as well as rising domestic competition in China.