Xiaomi is forming a new subsidiary to shore up its goal of becoming the next chipmaking powerhouse, part of a RMB 10 billion ($1.5 billion) artificial intelligence of things (AIoT) initiative.

Pinecone, a chipset subsidiary launched in 2014, will be restructured. Part of the team to be split out to form a new company named Dayu (Big Fish, translated literally), according to a company announcement released Tuesday. The newly formed semiconductor company will focus on the research and development (R&D) of chipset solutions in AIoT applications such as smart speakers, while Pinecone will continue to develop mobile computing processors for smartphones.

Xiaomi will hold 25% of Dayu, with the balance to be held by company employees. The new subsidiary may soon start raising funds independently—a number of investment firms had already expressed their interest, and several agencies “have completed due diligence,” Chinese media reported citing an employee.

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Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen