Chinese AI Startup StepFun Restructures to Focus on LLMs and AI Agent Phones

Chinese AI startup StepFun is restructuring its operations into two independent business lines: one focused on large language models (LLMs) and the other on AI agent terminals (smartphones). The smartphone business will operate under a new independent company, and both divisions plan to expand into overseas markets. This restructuring highlights a growing industry trend where AI startups transition from software-only models to integrating AI agents directly with dedicated hardware. By spinning off the hardware division and targeting global markets, StepFun aims to establish a direct channel to users while commercializing its LLM APIs internationally. StepFun recently launched its terminal brand STEPX and its first agentic AI phone, the STEPX Neo, which runs a custom agentic-native operating system called Step AOS. The company plans to sell its LLM APIs globally, focusing primarily on voice models, while using the hardware to showcase its model capabilities.