ZTE said it is positioning its business around a combined connectivity and computing model, expanding its role in AI infrastructure alongside its established telecom portfolio
In sum – what to know:
AI shift – Computing reached 27% of revenue as demand for AI infrastructure grows and becomes a larger part of ZTE’s overall business mix.
Carrier weakness – Reduced domestic telecom capex weighed on the network segment, impacting overall profitability despite revenue growth.
Global growth – International markets and enterprise demand are helping offset domestic pressures and support expansion in computing and devices.
Chinese vendor ZTE is reporting a growing contribution from its computing business as it continues to shift toward AI-related infrastructure and services.
The company posted revenue of CNY 34.99 billion ($5.1 billion) in the first quarter of 2026, up 6.1% year-on-year, with computing accounting for 27% of total revenue.
The increasing share reflects rising demand for AI infrastructure and related platforms, partly offsetting weaker spending from domestic telecom operators.
Growth during the first quarter of the year was supported by double-digit gains in computing, home and personal devices, and international markets. These segments helped counter a decline in domestic carrier investment, which weighed on the company’s traditional network business. Net profit attributable to shareholders reached CNY1.31 billion, while profit declined year-on-year due to softer infrastructure spending in China.
ZTE said it is positioning its business around a combined connectivity and computing model, expanding its role in AI infrastructure alongside its established telecom portfolio. The Asian vendor is developing an end-to-end framework spanning infrastructure, platforms, applications and devices, with a focus on supporting enterprise and large-scale computing use cases.
In its network segment, ZTE introduced new switching and interconnect technologies aimed at AI workloads, including a high-capacity chassis switch designed for large-scale clusters and a solution enabling distributed computing across distances of up to 300 km. These developments are intended to support the growing need to connect and manage compute resources across multiple locations, ZTE said.
International markets remained a key source of growth, driven by ongoing 5G deployments, fiber rollouts, and increasing demand for computing infrastructure. ZTE said it is also deepening collaboration with Chinese enterprises expanding overseas.
Looking ahead, ZTE said it expects AI to remain a central driver of its business, with continued investment in infrastructure, ecosystem partnerships, and operational integration.
“China Mobile is decreasing its communication network capex by more than 20% in 2026, while increasing its computing infrastructure capex by over 60%. The other Chinese telcos take similar strategies. So, ZTE has no choice but to develop its computing infrastructure business to sustain its growth. On the other side, unlike some Chinese vendors banned by the U.S., ZTE can still work with the U.S. chip suppliers such as Nvidia and Intel. This becomes a significant differentiator of ZTE when it develops business with Chinese Internet hyperscalers, such as Alibaba and ByteDance, and explores the international market,” Guang Yang, senior principal analyst at Omdia, told RCR Wireless News.
“In 2025, ZTE’s computing infrastructure revenue was boosted by the big contracts from these Internet giants. However, the contracts from Internet giants are more like a double-edged sword. They can boost the revenue, but also significantly compress ZTE’s profit. ZTE must find a way to balance its growth and profitability in 2026,” the analyst said.
For full 2025, ZTE had reported revenue of CNY 133.90 billion, up 10.4% year-on-year, with net profit reaching CNY 5.62 billion. During 2025, the company maintained strong R&D investment at CNY 22.76 billion, around 17% of total revenue.
Growth last year was driven primarily by its computing segment, where revenue rose approximately 150% year-on-year to represent 24.6% of total revenue, supported by strong demand for servers, storage, and data center solutions linked to AI deployments.
