Samsung will invest $22 billion to ramp up its AI and 5G segments in the next three years, per The Wall Street Journal. The planned spending serves as the company’s broadest investment in emerging technology since 2010.
The company’s likely hoping that bolstering its AI and 5G segments will help to offset declining revenue from the stalled global smartphone market.
Samsung posted smartphone sales of 22.7 trillion won ($20.3 billion) in Q2 2018, a 22% drop year-over-year (YoY) from 28.8 billion won ($25.8 billion) during the same quarter last year.
This investment expands on Samsung’s recent moves to build out its AI and 5G segments:
- Samsung announced plans to increase its AI-focused workforce to capitalize on its ambitious Bixby plans. The company launched three new AI research centers in Moscow, Cambridge (UK), and Toronto in May 2018, with plans to add over 1,000 AI-focused engineers by 2020. And its efforts in AI will likely help to improve the company’s voice assistant Bixby, which could in turn improve sales of Samsung’s overall product line — the company plans to integrate the digital voice assistant into all of its products by 2020.
- Samsung in January inked a deal with US mobile network provider Verizon to support 5G rollout in select US cities this year. Samsung is providing Verizon with end-to-end 5G equipment to support the network rollout in Sacramento and Houston in 2018. The electronics company will look to continue to capitalize on the burgeoning demand for 5G over the coming months.
And while Samsung is making strides in AI and 5G, it’s playing catch up among competition on both fronts:
- Apple, Google, and Alibaba all have voice assistants that are far more popular than Samsung’s. And as voice assistants are set to expand — reaching an estimated 5 billion devices by 2021 — competitors will continue to fight to make their voice assistants dominant in the market.
- And 5G equipment makers, like Nokia and Ericsson, have taken the lead in 5G global technology deployments. For instance, Nokia became the first 5G manufacturer to sign with a Big Four telecom for nationwide 5G rollout through its June deal with T-Mobile.