Hybrid AI strategy value realization Lenovo finds new ways for PC business

As people debate whether there is an AI bubble, it has already helped Lenovo take another step forward in the PC world. On November 20th, Lenovo announced its performance for the second quarter of the 2025/26 fiscal year ending September 30, 2025. One widely quoted data point is that Lenovo's global PC market share has reached 25.6%, higher than the previous fiscal year's 23.7%, setting a new historical high. During the performance conference, Lenovo Group Chairman and CEO Yang Yuanqing provided more details, "The growth is mainly driven by the strong performance of high-margin niche markets. Shipments of high-end PCs increased by 25% year-on-year, with AI PCs being the main contributor, accounting for 33% of Lenovo's PC shipments." In the past three years, the world has marveled at the intelligence of technologies like ChatGPT, with about 800 million people worldwide using it. More recently, the creativity of Sora's video generation has captivated many. Just as in the 2010s when consumers and businesses integrated the internet into every aspect of life, from ridesharing to food delivery apps, everyone became part of the Internet + era. Now, artificial intelligence is being given the same expectations. Even amidst debates about the existence of an AI bubble, the core and landscape of the market are undergoing profound changes. GPT-5 can identify changes in human immune cells in minutes, a task that human scientists would take months to solve. By 2030, or even earlier, artificial intelligence may become as ubiquitous as electricity or the internet, driving efficiency growth and ultimate convenience. Currently, the internal changes of the wave-makers are already evident. With the backing of AI, Lenovo's Intelligent Devices Group (IDG) revenue increased by 12% to $15.1 billion, and operating profit increased by 11% to $1.1 billion. According to IDC data from the third quarter of 2025, following Lenovo, the rankings of PC shipments are HP, Dell, Apple, and Asus, with market shares of 19.8%, 13.3%, 9.0%, and 7.8% respectively. In 2001, when Yang Yuanqing took over the helm of Lenovo Group, Lenovo was the sixth largest PC manufacturer globally, with 90% of revenue coming from the domestic market and a market share of about 30%. That year, total PC sales in China were only 8 million units. Today, Lenovo alone sells nearly 20 million units in a single quarter. In April 2024, Yang Yuanqing unveiled the first generation of AI PCs at an event in Shanghai, with 6 laptop models featuring a personal assistant named "Lenovo Xiaotian". Xiaotian can generate images, PowerPoint presentations, documents, and meeting summaries for users locally, without transferring the requests to the cloud. Yang Yuanqing also announced the company's mission for the next decade, one of which is to lead the AI revolution. Prior to the release of the AI PCs, IDC data for the first quarter of 2024 showed Lenovo with a global PC market share of 21.6%, followed by HP and Dell. A year later, Lenovo continued to dominate as the world's largest PC manufacturer, with shipments increasing by 17.3% year-on-year, and market share reaching a new high of 25.6%. This means that for every four PCs sold globally, one comes from Lenovo. Additionally, the Tianxi AI embedded in Lenovo's AI PCs has seen its average weekly usage rate continue to increase, reaching 42% in the second quarter. In recent years, Lenovo and its peers have been looking for the next hot spot in the maturing PC business, with AI being identified as the main driver. This trend includes not only AI-optimized PCs but also servers and software. Under this trend, investors are increasingly focused on market share because when demand rebounds and sales of all AI-based new products increase, market share becomes crucial. In summary, there is a seed of future growth embedded here. Through a diverse deployment of AI technology, Lenovo is proving itself to be not just a hardware manufacturer but a technology company integrated with hardware, software, and services. AI is not just in the cloud; Lenovo's favored AI is Hybrid AI, combining "public intelligence" and "private domain intelligence." Lenovo aims to offer a rich product line encompassing PCs, tablets, smartphones, and IoT devices, integrating them into a unified ecosystem, offering "one AI, multiple devices." At the Lenovo Tech World in 2024, Huang Renxun and Yang Yuanqing jointly launched the "Lenovo Hybrid AI Advantage," emphasizing that AI will achieve "superhuman productivity." Huang praised Lenovo as a partner driving comprehensive application of AI from the cloud to the edge, including server and PC ecosystems. At the 2025 GTC conference, Huang Renxun visited the Lenovo booth again, endorsing the Lenovo GB300 NVL72 liquid cooling rack solution as a key innovation for AI data centers. During the performance conference on November 20th, Yang Yuanqing said, "Our continuous investment in AI-driven innovation and research and development is yielding significant results. Lenovo maintains a leading position in all major PC categories... In our PC product portfolio, our leadership extends even further into strategic categories such as Windows AI PCs, gaming, and high-end PCs. As the industry transitions to more intelligent and immersive computing experiences, these areas become key growth drivers." Yang Yuanqing predicts that AI PCs will drive an overall upgrade of the market, with 10% of PCs being replaced by AI PCs this year. "Our global leading position is balanced across markets around the world, with four out of the top five markets being in first place, and market share in all regions increasing this quarter," he said. In October, Yang Yuanqing and Luca Rossi, Lenovo Group's Executive Vice President and President of IDG, visited Saudi Arabia to inspect a factory under construction in Riyadh. The 200,000 square meter park, which broke ground in February 2025, will produce computers, mobile devices, and servers. Testing production is expected by December 2025 and mass production by mid-2026, with approximately 2,000 local employees already hired. On November 20th, Luca Rossi exclaimed, "I was on-site and very surprised by the progress of the factory, which, even by Chinese standards, is very fast. The remarkable progress overseas is admirable, and this factory is one of our most complete for international markets." Currently, Lenovo's EMEA region accounts for approximately 26% of revenue, second only to the Americas. For hardware manufacturers like Lenovo, HP, Apple, the Middle East region, with a focus on Saudi Arabia, is even more profitable. For example, Apple's overall gross margin is close to 24%, with a gross margin of 34.7% in Europe/Middle East. In Saudi Arabia, 71% of the population are under 35 years old, with a median age of 29, and they have high demand for consumer electronics, educational technology, e-commerce, and IoT - an unparalleled demographic dividend. More directly, for manufacturers, establishing local factories can reduce import tariffs and logistics costs, which can improve EBITDA by 2%-3%. As Luca Rossi summarized, our current achievements stem from our innovation capabilities, rapid product launches, first-class cost structure, excellent operations, and a unique "global + localization" business model; all these advantages are structural and will continue to benefit the company in the future. On the 20th, Lenovo executives also revealed that in January 2026, the company will launch a personal super intelligent entity during the CES consumer electronics show, enabling terminal devices to have the ability to "hear what you hear, see what you see, remember what you experience" while also being able to "think what you think and act as you wish." In 2023, Lenovo showcased over 40 AI devices and solutions at CES, which were well-received by institutional investors.