Huawei lifts R&D wager as growth cools

Huawei has raised its research spending to one of the heaviest levels in the global technology industry, saying it invested CNY192.3 billion in 2025, or roughly $27.8 billion, equal to 21.8% of annual revenue. The figure came with group revenue of CNY880.9 billion and net profit of CNY68 billion, underlining how the Shenzhen-based company is continuing to prioritise long-term technology development even as top-line growth slowed sharply from the previous year.

That spending push matters because Huawei is no longer in simple recovery mode. Its 2025 revenue growth was 2.2%, far below the 22.4% recorded in 2024, although the total still marked the company’s second-highest annual revenue on record, just behind its 2020 peak. The business has now posted a fourth straight year of growth since the steep 2021 downturn that followed tighter US sanctions, which cut off access to advanced chips and Google’s Android ecosystem and hit its handset business hard.

A closer look at the numbers shows a company whose growth engines are shifting. Huawei’s information and communication technology infrastructure division, still its biggest business, increased revenue by 2.6% to CNY375 billion in 2025. The consumer business, which includes smartphones and other devices, rose 1.6% to CNY344.5 billion. Cloud revenue, however, fell 3.5%, suggesting that competition and the uneven pace of enterprise AI monetisation are weighing on one of the sectors where Huawei has been trying to build scale. By contrast, intelligent automotive solutions surged 72.1% to CNY45 billion, making car technology one of the clearest bright spots in the group’s portfolio.

Huawei’s choice to keep ploughing more than one-fifth of revenue into research reflects more than corporate ambition. It is also a strategic response to export controls and supply-chain pressure. The company has been directing money into software, chips and manufacturing tools aimed at reducing dependence on restricted US technology. In its annual report statement, Rotating Chairwoman Sabrina Meng said Huawei’s performance remained steady and signalled that the company would keep increasing investment in connectivity, computing, cloud, devices, intelligent driving and AI, while integrating AI and security more deeply into products and networks.

The scale of that commitment is evident in Huawei’s innovation base. By the end of 2025, about 114,000 employees, or 53.7% of its workforce, were working in R&D, while the company said it held 165,000 active granted patents worldwide. Its cumulative R&D spending over the past decade reached CNY1.382 trillion. Huawei also said more than 36 million devices were running HarmonyOS by the end of 2025, a sign that its effort to build a self-reliant software ecosystem is gaining some traction, even if global reach remains constrained compared with earlier years.

There are signs that the investment is beginning to influence the next competitive phase, particularly in AI hardware. Customer testing of Huawei’s new 950PR AI chip has gone well, according to people familiar with the matter, with ByteDance and Alibaba planning orders. Reuters reported that Huawei expects to ship about 750,000 units this year, helped by improved compatibility with Nvidia’s CUDA software environment and stronger positioning in inference, the fast-growing business of running trained AI models in practical applications. That matters because China’s AI market is moving from headline-grabbing model launches towards commercial deployment, where software compatibility and system response can count as much as raw performance.

Yet the broader commercial backdrop remains mixed. In smartphones, Huawei retained the top position in China in January 2026, according to Counterpoint data cited by Reuters, even though its sales fell 27% year on year as the market as a whole dropped 23%. Apple, by contrast, was the only major brand to post growth that month. Those figures suggest Huawei’s consumer revival is real but not linear, and that the company still faces a tougher demand environment at home than the headline comeback story sometimes implies.