Nvidia Corp ( NVDA ) supplier Foxconn Technology Group, also known as Hon Hai Precision Industry Co., Ltd ( HNHPF ) , is reportedly shifting its financial firepower toward artificial intelligence.

Foxconn Pours Billions Into AI As Business Mix Shifts

Foxconn Chairman Young Liu said that the company will invest between $2 billion and $3 billion a year into AI infrastructure and technology, marking a dramatic change in how the world's largest electronics manufacturer allocates capital, reported Reuters.

He said AI spending will represent more than half of Foxconn's roughly $5 billion yearly capex over the next three to five years.

Liu also expects China's crowded electric-vehicle market to undergo a shakeout "soon" and noted that the company is in discussions with the Japanese government about possible investments in AI and EV-related projects.

However, he told the publication that AI will account for most of the company's investment in the near term.

See Also: Nvidia Vs. AMD: The Gap Isn’t Closing — It’s Getting Wider

China's EV Sector Faces ‘Very Fierce Competition'

Liu warned that China's EV industry is barreling toward a shakeout as too many companies chase too little profit. 

"They're not making money," he said, adding that limited government support cannot sustain every automaker in the world's largest EV market.

Foxconn has delayed its goal of capturing 5% of the global EV market by 2025, but is waiting for conditions to improve before scaling investments, the report said.

Liu said the industry could soon resemble the early PC market, where intense competition spurred companies to outsource manufacturing — a trend he expects to repeat in EVs.

Foxconn's AI Division Now Outpaces Consumer Electronics

Foxconn's cloud and networking division — which includes its AI server business — has outpaced consumer electronics for the past two quarters.

In August, Foxconn's AI server unit surpassed iPhone assembly to become its largest business.

The division's revenue jumped 47% year over year to NT$731.8 billion ($24.32 billion) in the second quarter of 2025, overtaking the Smart Consumer Electronics segment, which brought in NT$634.5 billion ($21.08 billion).

Last month, the company unveiled a $1.37 billion commitment to expanding its AI and supercomputing infrastructure.

Nvidia ( NVDA ) places in the 98th percentile for Growth and the 92nd percentile for Quality in Benzinga's Edge Stock Rankings. Click here to see how it compares to competitors.

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