TOKYO – November 21, 2025 – Foxconn, the world’s largest contract electronics manufacturer, plans to invest $2 billion to $3 billion annually in artificial intelligence (AI) over the next three to five years, Chairman Young Liu told Reuters. The investment will primarily focus on AI infrastructure, data centers, and technology development, reflecting the company’s strategic pivot toward high-growth tech sectors.

In addition to AI, Liu highlighted the highly competitive and crowded electric vehicle (EV) market in China, predicting a wave of consolidation in the near future. He indicated that unprofitable startups are likely to disappear as government support proves insufficient to sustain every EV maker in the world’s largest automotive market.

“They’re not making money,” Liu said, noting that the Chinese EV sector is facing very fierce competition. “Once consolidation occurs, the automotive landscape will become much more stable.”

AI Investment to Dominate Foxconn CapEx

The planned AI investment represents over half of Foxconn’s roughly $5 billion in annual capital expenditure, Liu said. Foxconn’s cloud and networking business, which includes AI server manufacturing, has already surpassed its consumer electronics segment for two consecutive quarters, underscoring the rapid shift in the company’s revenue mix.

Liu also emphasized the importance of local AI manufacturing for ensuring data sovereignty, noting that the company is in discussions with the Japanese government about potential AI and EV-related investments. While details remain limited, these talks indicate Foxconn’s intent to expand its footprint in Asia beyond Taiwan and China.

Implications for the EV Market

The Chinese EV sector is under pressure as competition intensifies. Major automakers, such as BYD, have already reported significant profit declines and have lowered sales targets for 2025. Foxconn itself delayed its ambitious plan to capture 5% of the global EV market by 2025, citing slower-than-expected demand.

Despite these challenges, Foxconn is positioning itself to capitalize on a potential outsourcing trend in EV production, akin to the early personal computer industry. Liu likened the future EV market to the 1990s PC industry, where competition drove companies to outsource production—a model Foxconn pioneered with Compaq.

“Once they start outsourcing with one successful example, the others will follow,” Liu said. “That’s exactly what we saw in the PC market.”

Foxconn’s strategy reflects a dual approach: investing heavily in AI while remaining cautious in the EV sector, waiting for market conditions to improve before scaling production. The company is also exploring other high-tech areas, including quantum computing and robotics, positioning itself at the forefront of global technology innovation.

Strategic Outlook

Foxconn’s planned $2–3 billion annual AI investment and measured EV expansion highlight the company’s evolution from a traditional electronics contract manufacturer into a technology infrastructure and AI powerhouse. With global AI adoption accelerating and the Chinese EV sector consolidating, Foxconn aims to leverage its manufacturing expertise to dominate both AI hardware production and the future of electric mobility.