November 21, 2025 : Foxconn, the Taiwanese electronics giant widely known as Apple’s top iPhone assembler, is making a bold pivot — committing to invest between US$2 billion and US$3 billion each year in artificial intelligence over the next three to five years, according to company chairman Young Liu.
The planned AI investment will constitute more than half of Foxconn’s projected capital expenditure, which Liu said is about US$5 billion annually. This marks a clear shift in the company’s priorities, with AI infrastructure and cloud networking taking precedence over traditional consumer electronics.
Why the Big AI Bet?
Liu pointed out that Foxconn’s cloud and networking division — which includes AI servers — has now outpaced its traditional consumer electronics business for two consecutive quarters. This underscores a major change in Foxconn’s revenue mix, driven by surging demand for AI infrastructure.
EV Shakeout Warning in China
Apart from its AI ambitions, Liu sounded a stark warning about the overcrowded electric vehicle (EV) market in China. He said many EV startups are struggling financially, and government support is not strong enough to sustain them all.
“They’re not making money,” he said, predicting a wave of consolidation. According to Liu, once the shakeout happens, the EV landscape will stabilize, with only the most efficient or well-capitalized players surviving.
Foxconn’s EV Strategy
While Foxconn had previously set an ambitious goal to capture 5% of the global EV market by 2025, Liu confirmed that the company is delaying aggressive EV investments until market conditions improve. He also sees an outsourcing opportunity emerging: as EV competition intensifies, Foxconn could act as a contract manufacturer for automakers — much like it did in the early PC era.
Liu drew a parallel with Foxconn’s role in the PC industry of the 1990s, saying that major automakers might soon prefer to outsource EV production rather than build factories themselves.
Global Ties and Data Sovereignty
Foxconn is also exploring strategic partnerships for both AI and EV investments. Liu revealed that they are in talks with the Japanese government to expand in these areas. He emphasized that local manufacturing of AI systems will be critical in preserving data sovereignty — a growing concern in many countries.
Bigger Picture: Foxconn’s Transformation
This pivot is part of Foxconn’s larger strategy to diversify beyond consumer electronics. By heavily investing in AI infrastructure, the company is positioning itself as a crucial player in the cloud, data centers, and next-gen manufacturing.
At the same time, Liu’s comments on the EV market suggest Foxconn is preparing for a future where not every EV company can survive — and is betting that contract manufacturing will become a dominant model.
Summary
Foxconn plans to invest up to $3 billion annually in AI, shifting its capex focus. Chairman Young Liu also predicts a major consolidation in China’s crowded EV industry due to intense competition and weak profitability.