(Yicai) April 30 -- As telecom operators’ 5G network deployments mature, China’s telecom equipment giant ZTE is shifting its focus to smart computing infrastructure projects for internet companies, positioning the sector as a strategic market and restructuring its internal organization to align with this pivot.

“In the first quarter, we secured significant shares in annual general computing server framework tenders for internet firms, with orders now scaling up and entering batch delivery phases. Collaboration on AI server projects is also accelerating exponentially,” Xie Junshi, executive vice president and chief operating officer of ZTE, told Yicai.

ZTE’s 2024 revenue fell 2.38 percent year-on-year, while net profit dropped 9.66 percent, weighed down by slower 5G network construction progress.

“We are confident in returning to revenue growth this year,” Xie said to Yicai. The emergence of the DeepSeek AI model has reshaped the server market. While clients previously prioritized infrastructure for AI training, investments are now shifting toward inference-oriented layouts, Xie noted. Leading internet firms and telecom operators are ramping up spending on computing power infrastructure.

Those who seize this opportunity will dominate the computing power market, he emphasized.

To adapt to the faster-paced demands of internet clients, ZTE is overhauling its organizational and decision-making frameworks, which were historically tailored for telecom operators, Hu Xuemei, vice president of ZTE, told Yicai.

“We’ve established dedicated teams for each client, comprising sales, supply chain, technical, R&D, marketing, and commercial personnel. While these members nominally remain in their original departments, they must meet strict response deadlines -- for instance, 24 hours for R&D and 48 hours for supply chain -- significantly shortening decision cycles,” she said.

Hu acknowledged initial challenges in frontline decision-making during the restructuring but noted improved operational efficiency after clarifying direct decision-making authority for specific scenarios.

At ZTE’s recent China Ecosystem Partners Conference, Xie revealed that smart computing servers accounted for over 60 percent of the firm’s total server and storage orders in Q1. The company’s integrated smart computing systems now support applications of the DeepSeek model.