Lenovo is the biggest player in the PC market but, like its competitors, it’s facing disappointing sales figures. The Chinese company has just strengthened itself with John Thornton as non-executive director, who brings experience from Ford and Goldman Sachs with him. In addition, a $1 billion investment in AI technology should bring a rebound.
That the PC market has slumped since the pandemic has been known for some time. Net profit was down 66 percent at Lenovo this quarter, a slightly smaller decline from three months earlier (75 percent). Lenovo does expect PC sales to rebound somewhat, although The Register reports that it is looking to diversify. Servers, storage and services should be able to offset the disappointing PC results.
New manpower and AI
In addition, Lenovo has appointed John Thornton as a non-executive director and consultant. Thornton is expected to help shape Lenovo’s financial strategy. He is known as a China expert and has work experience at Ford and Goldman Sachs, among others. In 1997, he helped with the latter’s $4.2 billion IPO of China Telecom. Since then, he has done much work related to China, including political pursuits as a U.S. representative.
During a conference call last week, Lenovo chief Yanqing Yang stated that Lenovo will invest $1 billion in AI, spread over three years. Specifically, this will include “AI equipment, AI infrastructure and AI solutions,” Yang said. In doing so, it will iterate on the AI-focused servers it recently provided for Chinese customers.
Given the tricky geopolitical relations between China and the U.S., Lenovo can play a very meaningful role domestically. However, GPUs from the main vendors Nvidia, AMD and Intel may not exceed a hard computing limit if they wish to export them to China. Thus, America hopes to keep the West’s AI capabilities to itself.