Honor’s newly appointed CEO has committed to investing $10 billion over the next five years to accelerate the company’s AI-driven transformation. The Chinese smartphone maker aims to integrate AI technology across its devices.

CEO James Li Jian introduced the “Alpha” investment plan on Sunday in Barcelona, ahead of the MWC mobile trade show. The initiative is part of Honor’s strategy to shift from being solely a smartphone manufacturer to an AI-focused ecosystem company.

The plan will begin with the launch of an AI-powered smartphone designed to redefine user interactions. Over time, the AI integration will extend to other devices, including PCs, tablets, and wearables. However, Li did not precisely say when the AI smartphone would be released.

Honor intends to invest most of its US$10 billion budget in working with global partners to “open technology boundaries” and “co-create a new paradigm for AI devices in the agentic AI era,” a company representative stated. This investment will focus on integrating AI into traditional hardware and advancing next-generation AI agents to enhance human-device interaction.

The remaining funds will support efforts to enable different AI devices to communicate with each other and to prepare for the future of artificial general intelligence. Li, who succeeded long-time leader George Zhao Ming in January, encouraged industry partners to collaborate by sharing their AI capabilities to build a platform for multiple AI-powered devices.

“This includes the industry becoming truly open, enabling seamless collaboration across different operating systems, and building a value-sharing AI device ecosystem,” he stated.

As the Shenzhen-based smartphone company undergoes a management reshuffle, it is looking for a fresh direction amid increasing competition in the industry. With manufacturers racing to enhance their devices with AI-powered features, the market is expected to become even more competitive. The previous week, Honor revealed that it had incorporated Chinese AI start-up DeepSeek’s R1 model into its Yoyo virtual assistant and search engine for both smartphones and laptops.

Honor has worked with major tech companies such as Alibaba, Tencent and ByteDance in China to equip its smartphones with AI capabilities. Meanwhile, on the global stage, Honor collaborates with Google to integrate Gemini AI models into its devices, enabling features like translation and an “AI eraser” for photos.

Honor, which was sold by Huawei Technologies in 2020 due to U.S. sanctions, has been struggling with growing competition in China, leading to a decline in its market share.

According to research firm IDC, Honor’s smartphone shipments in China dropped by 14.9% year-on-year in the fourth quarter, marking the steepest decline among the top five brands. It rated fifth with a 13.7% market share, down from 16.8% the previous year, falling behind Apple, Vivo, Huawei, and Xiaomi.

Despite these setbacks, Honor has been expanding in international markets. Research firm Canalys reported a 67% increase in shipments across the Middle East last year, reaching 3.2 million units. Additionally, Counterpoint Research noted that Honor overtook Samsung Electronics as the top seller of foldable smartphones in Western Europe during the year's second quarter.

As part of its global expansion, the company announced plans to introduce over 30 new products in Indonesia in 2025.