BEIJING (Feb 20): Chinese tech company Lenovo reported hefty gains in quarterly revenue and net profit that beat expectations and said it would benefit from the adoption of DeepSeek's artificial intelligence (AI) model in its products.

Driven by robust demand for its AI-powered servers, Lenovo's third-quarter revenue surged by a fifth to US$18.8 billion (RM83.1 billion), ahead of an LSEG consensus estimate of US$17.8 billion.

Net profit more than doubled from the previous year to US$693 million, trouncing an average forecast of US$367.7 million.

Though best known for its personal computers, the company has diversified in recent years, expanding into software and services. It also has positioned itself to benefit from the booming demand for AI applications by expanding its AI server and software businesses.

Lenovo launched its first AI-powered PCs in China last May and followed that with a global roll-out in September. Chief executive officer Yang Yuanqing has projected that AI PCs will account for a quarter of Lenovo's shipments by 2025, potentially reaching 80% by 2027.

The company said this week it had integrated technology from start-up DeepSeek — which has upended the AI sector with its low-cost model — into its devices, including PCs and tablets.

"DeepSeek has improved AI efficiency. The new models with a high inferencing efficiency and low computing power costs will democratise access to AI," Yang told Reuters on Thursday in a post-earnings interview.

That would drive demand and increase the ways in which AI can be used, he said, adding that the emergence of DeepSeek may also boost demand for GPU servers.

Lenovo's infrastructure solutions group, which includes servers, saw a 59% revenue increase in the December quarter compared with the previous year.

The solutions and services group, which offers cloud-based software for enterprise clients, posted US$2.3 billion in revenue, up 12% from a year earlier.

Uploaded by Siow Chen Ming