Chinese technology company Xiaomi Corp will invest 20 billion yuan ($2.7 billion) in research and development this year, in an effort to crack the high-end, AI-backed smartphone market where competitors including Honor, Oppo and Vivo are all pushing to expand their presence, despite what experts call "limited progress" so far.

Xiaomi Chief Executive Lei Jun has said that this is "the only way for Xiaomi to grow" and has described it "as a battle of life and death".

The company, Lei said during a speech in Beijing on Monday, is working hard to sharpen its technological strength in areas such as mobile imaging and artificial intelligence.

"Xiaomi fully embraces the research on AI large language models, and the latest 1.3-billion-parameter model has successfully run locally on mobile phones, with some scenarios comparable to the 6-billion-parameter model running on the cloud," Lei said.

Large language models, or LLMs, are the key technology behind the hugely popular ChatGPT, an AI chatbot developed by US-based AI research company OpenAI.

Lei said the company's voice-activated AI assistant has been upgraded to support a large language model and users have been invited to participate in tests from Monday.

He said Xiaomi has engaged in AI research since July 2016 and that the company had established a team in April this year for the research and development of a large language model. It has, at present, over 3,000 employees working on AI-related research.

Huawei Technologies Co, whose smartphone business is on a comeback trail after being crimped by US government restrictions since 2019, also showcased its LLM-powered applications earlier this month. Huawei's AI assistant Celia, for instance, can quickly translate a 3,000-word English news report into Chinese, write a summary and provide relevant data for readers to better understand the report.

Honor Device Co Ltd also said in June that it is exploring the possibility of harnessing AI LLMs on devices.

Chinese smartphone companies are viewing the development of in-device LLMs as an important aspect to build a high-end image, said Lu Yanxia, research director at IDC China.

However, the success of LLMs depends highly on computing power as LLMs typically require training with trillions of words, which is still a challenge for smartphones. But with domestic phone makers investing in the field, the application of LLMs in smartphones will create new opportunities, Lu said.

Meanwhile, Xiaomi unveiled late on Monday its latest four-legged robo-dog CyberDog 2, which can stand on one leg while resting on a chunk of tofu without destroying it, as part of efforts to build its premium image.

Xiaomi has improved the cyberdog's mobility with self-developed CyberGear micro-actuators, which make the robot more agile and capable of performing complicated maneuvers, such as continuous back flips and fall recovery.