Huawei profit falls 36% as AI costs rise

Huawei said net profit fell 36 percent in the first half of 2026 as the Chinese technology company increased spending on AI-related research and faced rising costs.

The company reported net profit of 23.8 billion yuan, or $3.54 billion, for January to June, down from 37.2 billion yuan in the same period in 2025. Revenue rose 9.5 percent from a year earlier to 467.8 billion yuan.

Huawei said it put about a quarter of its revenue into research and development as it invests in computing products intended for AI use. Research and development expenses reached 121 billion yuan in the first half, up from 97 billion yuan a year earlier.

A company spokesperson said Huawei continued to face challenges including “external uncertainty” and higher raw material costs. The spokesperson said lower net profit was partly due to increased investment in future-oriented basic research and innovation in areas such as AI.

Advanced chips used to train and power artificial intelligence systems are a sensitive part of the technology rivalry between the United States and China. In May, Huawei said it had developed a new way to make semiconductors that could work around its lack of access to the most advanced chipmaking equipment because of US sanctions imposed on the company since 2019.