Nio's AI Chip Unit Could Unlock Hidden Value

Nio's stock price has been on a decline for several months, but Morgan Stanley believes that its AI chip unit, GeniTech, could become a valuable asset for investors. The bank thinks that GeniTech's research spending is turning into revenue and potential margin support through licensing, outside customers, and robotics applications.

Nio spun out GeniTech in June 2025 but still owns about 63% of the AI chip and semiconductor business. GeniTech has already shipped over 300,000 units of its flagship NX9031X processor, which powers all Nio and Onvo models and provides performance comparable to four Nvidia Orin chips.

Morgan Stanley sees potential in GeniTech's expansion beyond vehicles into humanoid robots, autonomous logistics, advanced manufacturing, and high-compute terminals. These applications could substantially widen the unit's addressable market.