At its recent quarterly earnings conference, Xiaomi's management clarified its position on the fastest-growing, though not yet most profitable, area of its business — artificial intelligence. The company's Vice President and CFO, Alain Lam, stated outright that the corporation has no intention of chasing immediate payback on its AI solutions and services. "Our AI investments are still in the stage of large-scale capital deployment. However, as a major corporation, Xiaomi is in no rush to move to instant monetization," he emphasized. According to the CFO, the segment is in its early stages of development, so the company is deliberately choosing a long-term investment strategy rather than quick returns.

A "No Rush" Strategy: AI Remains in the Massive-Investment Zone

There is no separate financial breakdown between the AI business and the electric vehicle division in Xiaomi's reporting: from a financial-reporting standpoint, these two blocks are combined, which makes it difficult to isolate the metrics of each sector. This is precisely why the company does not publish a separate "AI line" in revenue and operating results, but instead discloses its strategy through overall R&D figures and qualitative comments from management. This approach is typical of corporations that are in the phase of capital-intensive infrastructure and model building, rather than in the phase of harvesting commercial returns.

Financial Context: Profits Decline for the Third Consecutive Period

The statement about "unhurried" monetization came against the backdrop of challenging financial results. Xiaomi's net profit for the second quarter fell by 20.3%, marking a decline for the third consecutive period. This is important context: the company continues to increase its research and development spending even as its net profit steadily contracts, underscoring the priority of long-term technology bets over short-term financial optimization.

Record R&D Spending and the AI Share

In the second half… more precisely, in the first half overall, Xiaomi directed 25.6% more funds to research and development than a year earlier, bringing the total to $2.7 billion. According to the CFO's estimate, roughly 30% of this amount went specifically to the artificial intelligence sphere. Thus, about $800 million was spent on the AI area in the first half of the year — a significant share that confirms the talk of "massive investments" with concrete figures.

Memory Price Pressure and Competition

Beyond strategic decisions, Xiaomi's management also outlined current operational risks. Alain Lam noted that memory prices remain high and that competition in the industry has intensified. In his view, this pressure on the business is short-term in nature and should not affect the company's long-term strategy. Meanwhile, smartphones continue to be the largest source of revenue: in the previous quarter, their contribution fell by 7.5% to $6.2 billion, while the home appliances and Internet of Things (IoT) division saw revenue decline by 19.2% to $4.65 billion. Against this backdrop, the bet on AI and electric vehicles looks like an attempt at diversification and a search for new growth drivers.

Contradictory Data

It is worth noting a discrepancy in emphasis between various sources. On the one hand, at the quarterly conference, Xiaomi's CFO stated outright that the company is "in no rush to move to instant monetization" of AI and is in the phase of large-scale investments. On the other hand, a number of industry publications had previously reported that Xiaomi's investments in artificial intelligence began to generate profit earlier than expected, as well as the unveiling of the MiMo-V2 model lineup (MiMo-V2-Pro, MiMo-V2-Omni, MiMo-V2-TTS), which the company positions in competition with Claude, Gemini, and Grok. These versions are not necessarily mutually exclusive: it may be the case that individual AI products and services are already generating revenue, while overall the company is deliberately not setting a goal of rapid full monetization of the entire AI area, continuing to invest in infrastructure. Nevertheless, the phrasings "we are in no rush to monetize" and "profit earlier than expected" send different signals to the market, and the precise degree of commercial maturity of Xiaomi's AI business remains a matter of interpretation.