Lenovo reports big loss, plans to invest another $1B in artificial intelligence

MORRISVILLE – Shares in Lenovo, the world’s top PC manufacturer, declined as much 6% Thursday after the company reported a bigger loss than analysts expected for the first quarter of its fiscal year.

However, the company which operates dual headquarters in Beijing and the Triangle, is fighting back, announcing a further $1 billion investment in artificial intelligence. In June it announced a $1 billion bet on AI.

Revenues came in at $12.9 billion, some $500 million below the expectations of seven analysts polled by Refinitiv, Reuters noted.

“[Lenovo] remains committed to doubling investment in innovation in the mid-term, including an additional US$1 billion investment over three years to accelerate artificial intelligence (AI) deployment for businesses around the world – specifically AI devices, AI infrastructure, and AI solutions,” the company said.

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In particular, Lenovo plans to “focus on providing AI devices, AI-ready and AI-optimized computing infrastructure, and embedded AI generated content into the intelligent solutions of vertical industries to help customers improve their productivity.”

PC sales continue to fall globally, and Lenovo has shared in that pain. But the market is stabilizing, it added in a statement:

“Despite the past quarter’s challenging market and unfavorable macroeconomic conditions, Lenovo sees signs of market stabilization and improvement, component prices bottoming out, and believes the client device market can be expected to recover and resume growth in the second half of this fiscal year.”

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Chair and CEO Yang Yuanqing declared Lenovo is on the right course.

“Last quarter, the macro environment presented challenges, and our hardware business remained in a phase of adjustment, but we persisted in executing our strateg,” he said. “Our service-led business achieved strong growth and sustained profitability. Our non-PC revenue mix of the group revenue further increased year on year – demonstrating the effectiveness of our diversified growth engines and I remain cautiously optimistic about our business recovery over the next several quarters. As we continue to drive innovation and intelligent transformation, I am confident in the long-term position to deliver sustainable profitability and growth in the future.”

Read the full earnings report online.

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