Nicola Tangen, CEO of the Norwegian Sovereign Wealth Fund, interviews Alain Lam, CFO of Xiaomi, the Chinese technology company founded in 2010. The Norwegian fund owns more than 1% of Xiaomi, making this conversation particularly relevant for understanding their investment.

The discussion covers Xiaomi's evolution from smartphone operating systems to a comprehensive ecosystem including phones, smart home devices, electric vehicles, and humanoid robots. Lam explains how the company achieved remarkable speed in product development, launching their first smartphone in 2011 and their first car in 2024 after just three years of development.

Key topics include Xiaomi's 'China speed' advantage through local supply chains, their philosophy of offering high-quality products at honest prices, the integration of AI across all product lines, and their expansion plans for Europe. Lam also discusses the leadership style of founder Lei Jun and shares insights from his extensive reading of business case studies, including Apple Business Case Studies and Tesla Business Case Studies.

From Operating System to 450 Billion RMB Ecosystem

Xiaomi started in 2010 building smartphone operating systems on Android, then launched their first phone in 2011 at 1999 RMB, targeting the gap between expensive, low-quality products in the market.

The company now operates a 'human × car × home' ecosystem with over 450 billion RMB in annual sales, ranking #3 in European smartphones behind Apple and Samsung.

"We try to offer very high quality solutions to our users at affordable prices" - Alain, explaining Xiaomi's core philosophy that has remained consistent since founding.

Local supply chain advantages enable faster, more customized product development compared to standardized foreign components, allowing partners to co-develop tailored solutions.

Three-Year Car Development Using China Speed

Xiaomi launched their first electric vehicle in 2024 after deciding to enter the car industry in 2021, building both the car design and manufacturing factory in under three years.

The development team included 3,000 R&D engineers - "10 times more than other peers in terms of developing the first car" - reflecting their philosophy of massive initial investment to catch up quickly.

"50,000 cars sold in 30 minutes" with 20% of initial buyers ordering without test-driving, demonstrating the loyalty of Xiaomi's 180 million daily smartphone users in China.

The SU7 model set speed records at Nürburgring, with Ford's CEO reportedly unable to give up the car after six months of driving it.

Core EV technologies like electric motors, battery packing, and smart driving are developed in-house, while industry-standard components are sourced from suppliers.

AI Integration Across Manufacturing and Products

Xiaomi uses AI throughout manufacturing: simulating 100+ material formulas for car components, X-ray defect detection replacing human inspection, and sales prediction for retail stores.

The company launched their own large language model two weeks ago, ranking highly on openrouter.com and offered as open source to attract global developer talent.

"Software engineers now use AI for coding" while marketing teams use AI for initial content drafts, demonstrating practical implementation across business functions.

Future vision focuses on "physical AI" - integrating AI into phones, smart appliances, and cars to interconnect over 1 billion connected devices globally for enhanced user productivity.

Humanoid Robots for Manufacturing Enhancement

Xiaomi has invested in robotics since 2019-2020, developing humanoid robots exclusively for internal manufacturing rather than consumer applications.

Latest models demonstrate "two robots working consecutively for three hours with very low margin of error" in manufacturing scenarios.

Key innovations include human-sized hands with increased degrees of freedom and integrated cooling systems to prevent performance degradation from overheating during repetitive tasks.

"The physical data are still quite a way behind" compared to text and voice AI data, requiring simulation and corner case discovery for physical AI development.

Leadership Philosophy and Learning from History

Founder Lei Jun personally test-drove 150 different car models and required all management to drive 3,000 kilometers in Xiaomi's car before launch, plus obtain professional racing licenses.

"You have to understand the product, you have to love your product before you are in this business" - Alain describing Lei Jun's hands-on product philosophy.

Lam's reading includes research reports and business books about successful companies like those covered in Apple Business Case Studies and Tesla Business Case Studies, as well as extensive study of Business Failure Analysis Books.

"History always repeats itself" and "99% of the problems, there's already a solution out there" - core beliefs driving the leadership team's approach to learning from past business experiences.

Work philosophy combines hard work with smart prioritization: focusing on "three important things we want to achieve this quarter, this month, as well as this year."

European Expansion and Global Strategy

Xiaomi plans to export cars to Europe in the second half of next year, building on their existing #3 smartphone position in the European market.

The company established an EV research center in Munich with 75-100 engineers developing products like the Vision Granturismo concept car showcased in Barcelona.

European traditional OEMs are "lacking the smartness of the car" and "less focus on smart" compared to Chinese EV development, creating opportunity for Xiaomi's ecosystem integration.

"We have received quite a lot of European OEMs who've come to visit us" for experience sharing, indicating growing recognition of Chinese EV leadership.