Foxconn Commits Up to $3 Billion Annually to AI Investments

Foxconn is realigning its long-term strategy with a strong focus on artificial intelligence, increasing its annual investments to accelerate growth in AI servers, cloud infrastructure, and specialised hardware manufacturing. 

Foxconn’s AI Investment Strategy 

The company plans to allocate between $2 billion and $3 billion annually to AI out of its roughly $5 billion total yearly capital spending. Foxconn Chairman Young Liu told Bloomberg that "For now, AI will be the majority of the investment," highlighting that AI infrastructure will form more than half of the firm’s future capex.  

Foxconn’s cloud and networking division, which includes AI servers, has outperformed consumer electronics for 2 straight quarters. Foxconn targets a stronger role as an Original Design Manufacturer (ODM) for hyperscalers, including ASIC-based systems, NVIDIA Blackwell NVL36 and NVL72 rack solutions, and chip/AI server orders from AWS and Oracle. 

Consolidation in China’s EV Market 

Young Liu commented that China’s electric-vehicle sector faces "very fierce competition" and predicted a shakeout "soon" as unprofitable companies exit the market due to reduced state support. He said "They're not making money," suggesting that government assistance is insufficient to sustain every EV maker.  

According to Liu, the automotive environment will be "much more stable" once consolidation occurs. Liu also said the EV sector may mirror the early PC industry, where outsourcing became dominant, noting "Once they start outsourcing with one successful example, the others will follow," and "That's exactly what we saw in the PC market." 

Global Partnerships and Industry Opportunities 

Foxconn is in talks with the Japanese government about potential investments in both EVs and AI, underscoring its interest in building AI systems locally for data sovereignty. Meanwhile, distressed EV startups in China are liquidating advanced manufacturing assets, including cleanrooms, precision assembly lines, and battery-related machinery. These assets present opportunities for server manufacturers, including Foxconn, to reduce capital expenditure for upcoming factories, such as those planned in Texas. 

Read More: Foxconn Plans $1-5 Billion US Expansion, Partners with OpenAI on AI Server Design! 

Conclusion  

Foxconn is rapidly pivoting toward AI, committing substantial annual investment to strengthen its cloud, server, and chip capabilities. With China’s EV market nearing consolidation due to intense rivalry and weak profitability, Foxconn is delaying major EV expansion while pursuing global partnerships, especially in Japan, to support long-term growth. 

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