As competition in artificial intelligence shifts from model development toward real-world deployment, Xiaomi is betting that its advantage will come not only from building foundation models, but from integrating those models across a broad hardware ecosystem spanning smartphones, smart homes, and electric vehicles.

Xiaomi Corporation's second quarter showed a company being squeezed from both ends of its business at once: a surging memory-chip bill eating into its core smartphone margins, and its smart EV, AI, and other new initiatives segment still reporting a loss even as vehicle deliveries grow. Revenue for the three months ended June 30, 2026, fell 6.1% year-on-year to CNY108.92 billion (US$16.13 billion), and the company's preferred profitability gauge, adjusted net profit, nearly halved, down 42.6% to CNY6.22 billion — a far steeper decline than the top line, signaling that cost pressure, not just demand, is doing the damage.

Merida said its full-year 2026 business was still set to grow, supported by stable currency conditions, near-complete inventory reduction, and a stronger-than-expected rebound in lower-end bicycle demand in China. The bicycle maker outlined the outlook as the first-half pretax profit margin improved and product mix conditions became more balanced across key segments.

China has introduced five automotive chip certification and accreditation industry standards aimed at easing a key obstacle to domestic semiconductor adoption: getting locally designed chips qualified for production vehicles.