Xiaomi Earmarks 16 Billion Yuan for AI Talent and R&D
Xiaomi founder and CEO Lei Jun announced the company will direct 16 billion yuan ($2.2 billion) toward AI research, development, and capital expenditure this year. The investment is coupled with the official launch of a special talent recruitment project designed to attract top-tier AI professionals. This move underscores Xiaomi's strategic transition into an AI-driven organization, building on its total 2025 R&D spending of over 33 billion yuan. The company plans to invest over 60 billion yuan in AI over the next three years to integrate intelligence across its product ecosystem, from smartphones to electric vehicles.
EV Growth Surges 223.8% as Smartphone Revenue Declines 2.8%
Xiaomi's focus on new ventures appears necessary as its financial results reveal a company of two distinct halves. For the full year of 2025, Xiaomi reported a 25% increase in revenue to 457.3 billion yuan and a 43.8% climb in adjusted net profit to 39.2 billion yuan. This growth was overwhelmingly driven by its EV and new initiatives segment, which saw revenue explode by 223.8% to 106 billion yuan after delivering 411,000 vehicles. In stark contrast, the core smartphone business struggled, with 2025 revenue falling 2.8% to 186.4 billion yuan. The pressure intensified in the fourth quarter of 2025, when the company recorded its first quarterly profit decline since 2022, with adjusted net profit falling 23.7%.
Stock Price Halves Despite HK$11B in Share Buybacks
Investor confidence has been tested by the conflicting performance metrics and rising costs. Since a peak in late September 2025, Xiaomi’s stock price has been nearly cut in half, wiping out more than HK$800 billion in market capitalization. This decline occurred even as the company executed aggressive share buybacks, spending HK$6.3 billion in 2025 and another HK$4.7 billion in the first three months of 2026. The market's apprehension is fueled by significant headwinds, particularly soaring memory chip prices that are squeezing smartphone profit margins. This cost pressure, which has already forced competitors like OPPO and Vivo to raise prices, threatens to further weaken Xiaomi's traditional hardware business and adds urgency to its pivot toward AI and EVs.
