SHENZHEN, China(Reuters) - Chinese smartphone maker Honor will spend $10 billion over the next five years on developing AI for its devices as the former Huawei unit prepares for a public listing, its CEO James Li said on Sunday.

The Shenzhen-based company aims to expand from being primarily a smartphone company and develop a system of AI-powered PCs, tablets and wearables, Li said in a speech at the Mobile World Congress (MWC) trade show in Barcelona.

In December, Honor said it had completed a shareholder restructuring that moved it closer to an initial public offering, though no timeline has been announced.

Honor’s announcement comes amid a boom in Chinese AI investment spurred by interest in startup DeepSeek’s low-price large language models, with interested parties from local governments to home appliance makers rushing to integrate DeepSeek’s technology or do more AI research.

Last year Honor slipped from second to fourth place in terms of China phone shipments, with a 14.9% market share, amid renewed competition from its former parent, Huawei, and strong growth from Vivo, according to consultancy IDC.

In August Reuters reported that Honor is receiving a high level of support from the Shenzhen local government in terms of research and development funding, tax breaks and support expanding overseas.