Has Lenovo Grasped the AI Opportunity?

Negotiations for the live broadcasting rights of the 2026 FIFA World Cup in China (co-hosted by the United States, Canada, and Mexico) once reached an impasse. FIFA and CCTV had been locked in discussions for months without reaching a consensus.

Ultimately, with less than a month remaining until the opening ceremony, FIFA officials traveled to China for urgent negotiations, which culminated in a successful partnership.

Lenovo Reaps Benefits from AI

While this was primarily a deal between FIFA and CCTV, Lenovo appeared particularly enthusiastic. Shortly after the agreement was announced, my social media feeds were inundated with claims that Lenovo played a pivotal role in facilitating the partnership.

The underlying message was clear: Chinese fans could enjoy live World Cup broadcasts thanks to Lenovo.

In reality, the negotiation deadlock arose from pricing disputes. Additionally, CCTV had its own strategic considerations regarding whether to broadcast the event. Why was Lenovo so invested in ensuring the domestic live broadcast of the World Cup? Why did it seem more eager than the broadcasting platforms themselves?

Huxiu shed light on several key details. Qiao Jian, Senior Vice President, Chief Strategy Officer, and Chief Marketing Officer of Lenovo Group, stated, "If the broadcasting rights cannot be secured, the impact for sponsors will be significantly diminished."

In simpler terms, as a World Cup sponsor, if the event was not broadcast domestically, Lenovo's marketing investments and AI technology solutions centered around the World Cup would lose their primary access point to traffic in its largest sales market—China.

For Lenovo, the World Cup represented a rebranding opportunity and a critical moment to share its new narrative.

On May 24, Lenovo released its financial report for the 2025/26 fiscal year, revealing full-year revenue exceeding $83.1 billion, a historic high. Meanwhile, Yang Yuanqing, Chairman and CEO of Lenovo Group, set two ambitious goals: achieving $100 billion in revenue within the next two years and fully transforming Lenovo into an AI-native enterprise.

This marked the first time Lenovo had set a clear numerical revenue target since its inception. It also meant the company needed to increase its revenue by nearly $17 billion over two years, with a high annual growth rate of around 10%.

However, relying solely on traditional PC sales would make this target challenging to achieve. Yang Yuanqing placed his bets on AI.

Qiao Jian's statement to Huxiu also revealed Lenovo's strategic rationale: "In 2008, Lenovo sponsored the Olympics to demonstrate its globalization. This time, as an AI technology partner, we aim to accelerate our AI transformation through the World Cup."

This aligned closely with the narrative in its financial report. Lenovo repeatedly emphasized the growing share of AI-related revenue, which surged by 105% year-on-year in the past fiscal year and accounted for nearly 38% of the group's operating revenue in the fourth quarter.

This AI-centric narrative resonated with capital markets. Following the financial report's release, Lenovo's stock price soared, rising nearly 20% at one point and reaching a historic high.

However, Huxiu also raised a pertinent question on behalf of many observers: Lenovo's "AI-related revenue" is not a distinct business segment but a broad category encompassing AI devices, servers, services, and solution portfolios. All these could fall under this umbrella.

Due to this lack of transparency, questions persist: Is AI truly Lenovo's new growth engine, or is it merely relabeling existing businesses?

How to Sustain the AI Narrative

Looking back at Lenovo's AI journey, it elevated AI to a strategic level relatively early. In 2017, at Lenovo Tech World, Yang Yuanqing first proposed the "All in AI" strategy, declaring, "Lenovo has bet its future on AI."

Lenovo also introduced a "three-wave" strategy: maintaining leadership in the core PC business, expanding into smartphones and data centers, and betting on natural language interaction and AI. In simpler terms, Lenovo aimed to shift from a device-centric strategy to two core areas: "devices + cloud" and "infrastructure + cloud."

Considering Lenovo was in a "transformation recovery phase" at the time, Yang Yuanqing's later reassurance to the market seemed like an attempt to save face. He said, "Lenovo's recent financial results may not be great. If we hadn't invested in the three-wave strategy, we could have delivered better financials. But we didn't hesitate for the sake of transformation."

At this point, AI had become a non-negotiable priority for Yang Yuanqing. However, over the next eight years, Lenovo's AI efforts remained more about slogans than tangible execution, with strategy outweighing results.

For example, in 2019, Lenovo's "three-wave strategy" evolved into the "3S strategy," focusing more on hardware-driven smart IoT, smart infrastructure, and industry-specific intelligence. In 2023, Lenovo proposed the "Hybrid AI" strategy. At its Innovation Tech Conference that year, Lenovo unveiled its AIPC and introduced the concept of "Personal AI Twin," emphasizing localized computing power and privacy protection. It then launched over ten AIPC models in one go.

This year, Yang Yuanqing announced that Lenovo would fully transform into an "AI-native company." By his definition, an AI-native company does not treat AI as an add-on but rethinks, builds, and operates a business based on AI principles.

From a positive perspective, these strategic shifts reflect Lenovo's proactive adjustments to industry trends. Objectively, however, its AI roadmap has remained inconsistent.

Lenovo's ability to profit from AI in 2025 was not solely due to its years of "All in AI" efforts but also because it caught the inflection point of the AI industry—the shift from training to inference. As Lei Jun famously said, "Even a pig can fly if it stands at the center of a whirlwind."

On the hardware side, Lenovo leveraged its global supply chain network and adopted an aggressive strategy in the AIPC market. It deeply aligned with Jensen Huang's "five-layer cake theory," serving as one of the first partners to integrate ecosystem capabilities, translating chip performance into end-user experiences and amplifying its value as an integrator.

The ISG business turned profitable by capitalizing on its liquid cooling technology and system integration capabilities, benefiting from the enterprise-level computing deployment boom.

This marked Lenovo's first major success in its "All in AI" journey, seen as gaining entry into the AI arena.

However, sustaining this momentum would not be easy. The core issue remained unresolved: Lenovo lacked core technologies. From its early "trade-technology-industry" approach to its brief stint on the STAR Market and its current state, Lenovo has struggled to shed its "light-tech" label.

Liu Chuanzhi was once asked whether Lenovo should focus on scaling up or strengthening its capabilities. His response was to scale up first. This effectively addressed the well-known debate between "trade-technology-industry" and "technology-trade-industry." While Lenovo is large in scale, its "obesity" remains apparent, and its problems persist.

In other words, Lenovo's AI lacks a soul—it remains dependent on others. Lenovo's role resembles one layer of Jensen Huang's five-layer cake rather than a cake maker defining the rules of the game.

This becomes clearer when compared to Dell and Huawei. Dell has shifted its business model from selling computers to building AI factories. As NVIDIA's highest-tier global partner, Dell dominates the North American high-end computing cluster market. Currently, 66% of Dell's revenue comes from infrastructure, with $51.3 billion in AI backlog orders and a stable infrastructure profit margin of 10.7%.

Lenovo, therefore, is still seen as a "super integrator" and struggles to enjoy the valuation logic of an AI-native company.

The gap with Huawei is even more pronounced. Huawei invests over 20% of its revenue in R&D annually, achieving full-stack autonomous innovation. Amid global supply chain uncertainties, Huawei's "silicon-based black land" provides strong resilience against economic cycles. Lenovo, on the other hand, risks operational difficulties whenever upstream supply chains face disruptions or price volatility.

For example, Lenovo's PC business faces structural disadvantages when competing against Apple and Huawei as a "middle-layer solution provider." When open-source large models lower the barriers to private deployment, demand for Lenovo's "shovel sellers" may dilute.

This reflects the layered value distribution in the current AI industry: upstream chip, algorithm, and large model players set industry rules and capture the most profit, while mid- and downstream terminal assembly and scenario implementation players earn modest margins from manufacturing and services.

Lenovo's current strategy typically positions it in the mid- to downstream, deeply binding with upstream giants like NVIDIA.

This is Lenovo's dividend, but also its shackles. While it can capitalize on upstream technological advancements for short-term growth, its lack of core technologies prevents it from building genuine technical barriers and losing pricing power in competition.

Industry dividends are always temporary. Once market winds shift, growth reliant on external enablement cannot sustain. Without breaking free from its "light-tech, heavy-assembly" inertia, Lenovo will remain capped by the limitations of traditional hardware manufacturers.

I do not deny Lenovo's progress: after years of effort, it has earned money from AI and continues to tell its AI story. However, entry is just the beginning. While Lenovo has solved the question of "whether it can profit from AI," Yang Yuanqing must still answer whether Lenovo has truly seized the AI lifeline, whether it can "stand on its own with AI in the future," and how to keep telling the AI story.

Ultimately, to become a true AI-native enterprise, Lenovo must follow Huawei's example and patiently cultivate its "roots."

References:

Huxiu, "Lenovo is in a Hurry"

Tang Chen's Classmate, "Besides Making Shells, Lenovo Wants to Create the 'Intelligent Agent' Concept"

Lianxian Insight, "Is Lenovo's AI Journey Stable?"