Core Viewpoint - ZTE Corporation has reported a double-digit revenue growth in its semi-annual report, indicating a strategic shift towards "connection + computing power" amidst a challenging global telecom equipment market, with AI playing a crucial role in this transformation [1][2]. Revenue Growth - In the first half of 2025, ZTE achieved revenue of 71.55 billion yuan, marking a year-on-year increase of 14.5%, with second-quarter revenue and net profit both showing growth compared to the first quarter [1]. - The revenue gap between ZTE and Nokia has narrowed to 5%, approximately 3.5 billion yuan, suggesting a potential for ZTE to surpass Nokia in the near future [2]. Strategic Development - ZTE's "connection + computing power" strategy has allowed the company to diversify its revenue streams, with computing power and terminal revenues growing nearly 100% year-on-year, now accounting for over 35% of total revenue [1][3]. - The company has maintained its market share in traditional operator network business while expanding into future technology areas such as 5G-A and 10G access, thereby stabilizing its revenue base [3]. AI Integration - ZTE has integrated AI into its network and computing infrastructure, enhancing product competitiveness and establishing a comprehensive AI empowerment system [5]. - The company has filed nearly 5,500 AI-related patents globally, with about 50% granted, indicating a strong commitment to innovation [5]. Market Opportunities - The AI infrastructure market is projected to grow significantly, with capital expenditures expected to remain strong, and the AI hardware and software market anticipated to grow at an annual rate of 40%-55% [4]. - Major tech companies are increasing their investments in AI infrastructure, with Google, Microsoft, Amazon, and Meta expected to spend over $300 billion by 2025 [4]. Product Development - ZTE has launched various AI-integrated products targeting both individual consumers and enterprises, including smartphones and AI home devices, while also developing solutions for over 18 vertical industries [7]. - The company has achieved significant sales milestones, such as over 1 million units of its cloud computer and a 70% market share in operator services [3][7]. Challenges and Strategies - ZTE faces challenges similar to other companies, including pressure on profit margins due to intense competition in the computing power market [8]. - The company plans to enhance revenue scale in computing products, increase self-research ratios, and shift from single product sales to comprehensive solutions to improve profit margins [8].

Core Insights - The 2025 ZTE China Ecosystem Partner Conference focuses on the integration of digitalization and intelligence, aiming to accelerate customers' digital transformation [1] - ZTE's Executive Vice President and COO, Xie Junshi, discussed the company's strategies in AI and computing power during an interview, highlighting the importance of AI in driving technological and industrial revolutions [3] Group 1: AI Market and Investment Trends - The global AI market is projected to exceed $800 billion by 2028, with a compound annual growth rate (CAGR) of over 32% [3] - Domestic operators are expected to maintain over 20% growth in computing power investments by 2025, while leading internet companies will invest over 500 billion in AI over the next three years [3] Group 2: ZTE's Strategic Focus Areas - ZTE is focusing on three main areas in AI: enhancing connectivity through innovations in 5G-A, 6G, and optical networks; developing computing power solutions such as unified cloud management platforms; and deepening AI-native ICT infrastructure [3][4] - The company aims to strengthen AI applications on the consumer side with its "AI for All" strategy, which includes a full range of AI terminals and home upgrades [4] Group 3: Financial Performance and Future Plans - In Q1, ZTE reported revenue of 32.97 billion, a year-on-year increase of 7.8%, with over 35% of revenue coming from computing power and terminal businesses [4] - ZTE plans to expand its cooperation in the internet market and is well-prepared to meet the 2025 market demand with comprehensive computing power solutions [5] - The company will continue to invest in AI, aiming to integrate AI technology into industry applications and everyday life, fostering an open and collaborative AI ecosystem [5]