Künstliche Intelligenz hat Wang Chuanfu erwartet.

Recently, BYD presented a rather unimpressive business report documentation.

The profit is under pressure, and the gross margin of the automotive business is constantly being squeezed in the fierce price war. The price war, infrastructure investments for the overseas market, and intensive R & D activities in the field of intelligence are all eating into the profits. The net result in the first quarter showed an unusual downward trend, and the operating cash flows have shrunk significantly due to the temporary expansion of heavy assets.

The capital market is starting to ask again the long - standing question: Has BYD already reached its growth limit?

After all, the three strengths that BYD has relied on so well in recent years - electrification, scaling, and cost control - have now become the standard equipment of the entire industry. When all players push the Blade battery and the supply chain to the limit, BYD's original competitive advantage is mercilessly diluted by the industry.

But on May 28th, BYD held a very special press conference.

Wang Chuanfu, the chairman of BYD, stood on the stage and presented the Xuanji A3, the first self - developed 4 - nm high - performance intelligent access chip in China. The total computing power of the three chips exceeds 2,100 TOPS. This is not just a PowerPoint story; the chips are already being installed in vehicles, and starting this summer, they will be successively installed in vehicles.

He said a sentence that might be easily overlooked by the industry: A 4 - nm automotive specification chip is equivalent to a 2 - nm chip in the consumer electronics field.

Then there followed a series of other numbers:

A chip R & D team of over 7,000 people. The cumulative chip investments amount to over 100 billion yuan. There are four chip R & D centers and five wafer fabs. From product definition, architecture design, circuit development to wafer manufacturing, encapsulation, and testing, all seven steps are carried out independently.

According to Wang Chuanfu, BYD is the only automotive company in the world that has the ability for a complete chip manufacturing chain.

The real intention behind this statement is extremely aggressive.

Even Tesla can only develop its FSD chip by itself, and its chip manufacturing has to rely heavily on TSMC. NIO's Shenji chip also cannot do without contract manufacturing, and Huawei was once held back at the threshold of advanced manufacturing processes.

Globally, there is no automotive company like BYD that not only has the physical core of electric mobility (batteries and IGBT wafer fabs) but also revolutionizes the computing power of intelligence.

After the event, many people's first thought was that BYD is finally forced to enter the intelligent driving field.

But my real feeling is something else. Wang Chuanfu is finally really bringing BYD into the AI era.

I.

In recent years, there has been a hidden industrial division of labor in the entire electric vehicle industry.

The market assumes that intelligence belongs to the ecosystem led by Huawei, artificial intelligence belongs to Tesla's Silicon Valley narrative, chips belong to NVIDIA's hardware monopoly, and the operating system for user experience belongs to new automakers. BYD, on the other hand, is more of an industrial manufacturing champion in the electric mobility era.

Its strongest strength lies not in intelligence, not in the premium price of a luxury brand, and not even in software capabilities. It is the extreme manufacturing efficiency, the seamless supply chain, and the ability to thoroughly reduce the costs of electric vehicles.

Therefore, BYD has been in a very delicate position in recent years.

On the one hand, through its huge throughput, it has almost transformed the global electric vehicle market situation. On the other hand, the industry elite has always had an arrogant prejudice against it. They acknowledge that it can build cars, but they don't believe that BYD can represent the future.

Especially after artificial intelligence has redefined the foundation of the automobile, this voice has become louder and louder. Many people believe that what is really valuable in a car in the future is no longer the battery and the metal housing, but intelligent driving algorithms, chips, systems, and data cycles.

And in these areas, BYD has no advantages.

An even worse scenario occurred at the investor conference in March 2023.

Wang Chuanfu said a sentence on the stage that later spread wildly across the internet: Autonomous driving is all nonsense. Such a serious thing is just a fraud; it's like the new clothes of the king.

After this sentence was made public, he became the target of the technology industry. Yu Chengdong publicly criticized him for not understanding the industry, and He Xiaopeng directly said that autonomous driving is by no means nonsense. In those one or two years, it was almost an industry consensus that BYD was lagging behind in intelligence.

Wang Chuanfu did not give a public response at that time.

Therefore, the real appeal of this press conference is not the 4 - nm chip itself, but that Wang Chuanfu has for the first time laid his cards on the table with concrete hardware stacking. BYD doesn't just want to remain the manufacturing champion of the electric mobility era.

It wants to enter the next game.

II.

This process is related to a major turning point that has taken place in the Chinese technology industry in recent years.

In the AI era, more and more surviving Chinese companies are once again focusing on the capabilities of the underlying infrastructure. Huawei emphasizes the Shengteng computing power and the pure Hongmeng operating system again, Xiaomi strongly focuses on the basic research of chips, and ByteDance is vigorously building up its AI infrastructure.

The industry trend has completely shifted from the lightness and business model innovation in the mobile internet era to a more difficult and capital - intensive technological heavy industry.

What is special about BYD is that while other companies are expanding further based on their existing AI capabilities, BYD is changing from an electric mobility champion to an intelligent player.

This is a different level of difficulty.

Electrification and intelligence are two completely different capability models.

In the past ten years, BYD has built a physical defense of the industrial age, such as the Blade battery, the DM - i technology, and the super supply chain. This has made it the largest electric vehicle company in the world.

But today, the industry is moving into the next information phase.

Cars are increasingly becoming an AI terminal. Consumers are more interested in whether intelligent driving is intelligent, whether the infotainment system lags, whether the AI interaction is like interacting with a human, and whether the system can be continuously updated via OTA.

In the past, when making a purchase decision for a luxury car, attention was paid to the engine, the chassis, and the mechanical quality. Today, more and more users are comparing who has the "next - generation product".

Precisely in this regard, BYD has been the worst in the past.

Therefore, although this press conference shows a strong need to catch up, this catch - up action shows that Wang Chuanfu is extremely aware that the truly deadly danger in the AI era is never the bad short - term result, but the loss of the power to determine the end - phase of the next - generation automobile.

BYD's greatest success in recent years was defining how electric vehicles should be manufactured. Today, it is starting to fight for something else: Who has the power over the basic standards of the AI car?

Therefore, the most important protagonist of this press conference is not the new car, but the 4 - nm chip. What the chip really represents is that BYD is starting to fight for the brain of the next - generation automobile.

III.

To understand Wang Chuanfu's current actions, one has to go back to 2008.

In that year, the financial crisis passed by, and BYD was under pressure in terms of cash flows. On October 6th, a few days after Warren Buffett invested in BYD, Wang Chuanfu made a decision that shocked the entire industry. He acquired the insolvent Ningbo Zhongwei Semiconductor Wafer Factory for 171 million yuan.

The board of directors almost unanimously voted against the decision, and the in - house chip engineers were also skeptical. The industry regarded Wang Chuanfu's decision as a desperate move.

At that time, no one understood why a company that manufactures batteries and does contract manufacturing would want to get involved with such a cash - flow - consuming wafer factory.

But Wang Chuanfu was not playing for the current market, but for the decisive factor 15 years later, when electric vehicles would rely on power semiconductors. The most important, technologically demanding, and profitable chip in an electric vehicle is called IGBT.

The pay - off of this bet only became apparent after more than a decade. BYD had to wait alone for a long time.

In 2009, the first IGBT was manufactured, and in 2018, the IGBT 4.0 was introduced. Later, an unprecedented chip shortage broke out in the global automotive industry, and the entire industry was in panic over production failures. Only BYD was unscathed thanks to its in - house chip production.

The later successes such as the Blade battery in 2020 and the global sales champion in 2022 have their origin in that autumn of 2008, when no one could understand the acquisition of the insolvent wafer factory.

Today, in 2026, the business structure looks similar to that in 2008.

In the most difficult time, when the profit is most in doubt, he puts all his cards on the table and fights hard for a basic direction that the market currently does not understand. The difference is that the cards played have been upgraded.

In 2008, the bet was on IGBT and batteries, which corresponds to the physical level of electric mobility. In 2026, the bet is on intelligent driving chips and the complete wafer manufacturing chain, which corresponds to the computing power level of intelligence.

It is also important to note that the Xuanji A3 did not come out of nowhere. If you calculate backwards the development cycle of a 4 - nm automotive specification chip, the preparation took at least three years. That means that in the two years when everyone laughed at Wang Chuanfu for not understanding intelligence, he was actually working on this project.

He doesn't explain himself; he just quietly and silently collects cards.

IV.

There is an interesting change here.

In recent years, BYD has always been regarded as the company with the greatest speed. It has fast product iterations, a fast supply chain, fast price cuts, and fast scale expansion.

But today, Wang Chuanfu no longer looks like an efficient entrepreneur. He is more like a long - term entrepreneur.

A 7,000 - person chip team, an investment of 100 billion yuan, in - house construction of power semiconductor wafer fabs - all this is not intended to improve the quarterly result of the next month. On the contrary, it is currently burdening the balance sheet.

In the first quarter of this year, BYD's R & D expenses amounted to 1.13 billion yuan, which was a full 720 million yuan more than the net result in this quarter.

Therefore, BYD's business report documentation looks worse today. All real basic capabilities cost profits in the initial stage.

This is in line with the stories of ByteDance, Xiaomi, and Kuaishou at the same time.

In the Chinese hard - tech industry, more and more companies are accepting that the most expensive asset in the AI era is no longer internet traffic, but the underlying infrastructure. This also means long - term losses and a long period of non - understanding by the capital market.

But if you don't do it, you won't even have a chance to sit at the table in the future. This is the point at which Wang Chuanfu should be re - evaluated today.

V.

In recent years, other types of entrepreneurs have actually been celebrated in the Chinese technology industry. Light, fast, internet - oriented, platform - oriented, traffic - oriented.

Wang Chuanfu has always sounded a bit old - fashioned. He can't talk about the sexy future of humanity like Elon Musk, he's not as good as Lei Jun at gauging the mood of the masses, and he doesn't have the natural ability to attract attention like Yu Chengdong.

Often, Wang Chuanfu seems as discreet as a master craftsman who only works in the workshop.

But today, when artificial intelligence penetrates deep into the industry, the entire business world suddenly realizes that many of the most important competitions ultimately boil down to the most basic capabilities: Chips, operating systems, manufacturing technologies, control of the supply chain.

These things are slow, difficult, and it's hard to tell a good price - to - earnings ratio story in the capital market. But it is precisely these things that can determine the existence of a company in the long run.

What's even more interesting is that there is currently an unprecedented transformation towards more capital - intensive investments in the global technology industry.

OpenAI is seeking a billion - dollar investment for self - developed chips and data centers, Google has already developed its TPU to the seventh generation, and Tesla is building a heavy loop by developing its own AI chips and building its own Terafab wafer factory. The ultimate winners in the AI era almost all unanimously choose the most difficult path of vertical integration.

Artificial intelligence requires a very high level of cooperation between hardware and system. Delay, bandwidth, power consumption - every dependence on external suppliers can be a fatal...