Smartphone maker Nothing, based in the United Kingdom, reportedly raised $200 million in new funding.

The round values the company at $1.3 billion, The Times reported Tuesday (Sept. 16).

Co-founder Carl Pei said the funding will help the company speed product innovation and deepen investment into artificial intelligence-native products, according to the report. The company also plans to introduce some of its first AI-native devices next year, which it believes will be separate from its smartphones.

“In the near-term, we believe that the smartphone will remain the only device shipping at a billion-unit scale each year,” Pei said, per the report. “But soon we’ll all be carrying an additional device that will be just as important. In the coming years, we’ll learn that the more context we can feed our AI, the more useful it becomes. A new class of AI-native devices will emerge … this is a very exciting time, imagining devices that capture context across modalities and generate interfaces on demand, shaped by what the user is trying to accomplish.”

Nothing has debuted several popular Android-based phones known for their semi-transparent design and dot-matrix-inspired software, the report said. In a departure from industry standards, these devices feature a “glyph interface,” or a back inset with LEDs that can be lighted in different ways silently to signal notifications even when the phone is facing down.

Meanwhile, it was reported last month that Apple is planning a three-year iPhone overhaul as the company trails Google in the race to offer an AI-powered phone.

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Apple is expected this month to introduce the iPhone Air, a thin model aimed to replace the iPhone 16 Plus. Next year, the company plans to roll out its first foldable iPhone, and in 2027, Apple will mark the 20th anniversary of its smartphone with a curved-glass model.

PYMNTS CEO Karen Webster wrote in July that Apple is at risk of the iPhone becoming a commodity, and not “the consumer’s primary digital front door.”

Google’s Pixel 9 and Pixel 10 have embedded AI that allows users to speak, search, transact and navigate with a native AI experience.

“Apple can’t match that today,” Webster wrote July 23. “The risk is how many consumers will keep waiting around for Apple to deliver. It’s a massive pain to switch from iOS to Android devices, and most people don’t. Getting an AI-powered Android device just may be enough for people to dump their iPhones.”

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