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China's Honor Announces $10 Billion Investment in AI Devices

In Shenzhen, China, on March 2nd, Chinese smartphone maker Honor announced that it plans to invest $10 billion in the next five years to develop AI for its devices. CEO James Li mentioned this investment as the former Huawei unit readies for a public listing.

During a speech at the Mobile World Congress (MWC) trade show in Barcelona, Li stated that Honor, based in Shenzhen, aims to diversify its offerings beyond smartphones and delve into AI-powered PCs, tablets, and wearables.

Honor completed a shareholder restructuring in December to pave the way for an initial public offering, although no specific timeline has been disclosed yet.

The company's expansion into AI coincides with a surge in Chinese AI investments, fueled by the interest in startup DeepSeek's cost-effective large language models. Various entities, spanning from local governments to household appliance manufacturers, are eager to integrate DeepSeek's technology or engage in AI research.

Despite experiencing a decline in market share last year, slipping from second to fourth place in China's phone shipments with a 14.9% market share, Honor faces intensifying competition from its former parent, Huawei, and formidable growth from Vivo, as per IDC data.

In August, Reuters reported that Honor is receiving substantial backing from the local Shenzhen government. The support includes funding for research and development, tax incentives, and aid for global expansion efforts.