Chinese tech firm Lenovo’s “hybrid AI strategy” has fuelled quarterly revenue beyond expectations as it plans to propel further growth by leveraging DeepSeek’s recent breakthrough.
The company’s third-quarterly revenue grew by 20% to $18.8bn, beyond consensus estimates of $17.8bn. Net profit also doubled from the previous year to $693m.
In line with its AI approach, Lenovo launched its first AI-powered PCs in China last May, before a global rollout in September. Earlier this month, it also confirmed the integration of DeepSeek across its AI products.
As well as personal computing, the company has also stated its ambitions to build enterprise AI by “proactively leveraging hybrid infrastructure and the Lenovo Hyrbid AI Advantage”. R&D expenses for the firm were up 14% year-on-year to $261m with innovation investment focused on AI.
DeepSeek fuels AI efficiency
Lenovo’s CEO Yuanqing Yang hailed DeepSeek’s breakthrough as “improving AI efficiency” and said it will “democratise AI” in an interview with Reuters.
The Chinese startup shocked Silicon Valley with the launch of its R1 Reasoning model which can compete with other AI models despite being developed for a fraction of the price of its Western counterparts and using fewer chips.
DeepSeek’s reduced processing power needs may also advance the integration of AI into smaller devices such as laptops and phones.
“AI technology, with higher efficiency and lower costs, is accelerating the maturation of personal AI, particularly on-device AI and edge AI. It has also accelerated enterprise adoption of AI. This aligns perfectly with the direction of hybrid AI we’ve been driving and leading,” said Yang in Lenovo’s earnings report.
Yang expects AI PCs will make up 25% of Lenovo’s global shipments in 2025 thanks to the growing momentum of AI, rising to potentially 80% by 2027. The company’s PC business maintained its market leadership position in the quarter, commanding 24.3% of the market share.
Additionally, he also believes that the emergence of DeepSeek may also boost demand for GPU servers.
Lenovo’s infrastructure solutions group (ISG), which includes servers, saw a 59% year-on-year increase in revenue to $3.9bn. Its solutions and services group, which offers cloud-based software for enterprise clients, posted $2.3bn in revenue, up 12% year-on-year.
The earnings report stated: “ISG expects greater demand for hybrid infrastructure given the wider growth of AI, in particular demand for public clouds as well as on-premises data centres, private clouds, and edge computing.”
