The Smart-Home Operating System

Buy a cheap smart plug, bulb or sensor from an unfamiliar brand, and there is a good chance a single Chinese company is running it behind the scenes. Tuya provides the cloud, the app framework and the connectivity that let manufacturers turn ordinary products into smart, app-controlled ones without building any software themselves, a platform-as-a-service for the internet of things.

Its scale is in the developer base. By the end of 2024 Tuya had more than 1.3 million registered IoT device and software developers, up a third in a year, building on its platform.^[1] The business turned its first annual profit that year on revenue of about $299 million, most of it from the core IoT platform, and it sits on more than a billion dollars of cash.^[1][2] Because it is deliberately neutral, its devices work with Amazon Alexa and Google Home alike, Tuya sits invisibly inside a vast range of white-label hardware sold worldwide.

The most successful smart-home platform is one most people have never heard of, and it is Chinese by design, white-label by strategy.

The single-vendor giant next door

Tuya is the horizontal, open version; the vertical, closed version is Xiaomi. Its AIoT platform connected more than 1.07 billion devices, excluding phones, tablets and laptops, by the end of 2025, with tens of millions of users owning five or more Xiaomi-connected devices.^[3] Between Tuya’s white-label ubiquity and Xiaomi’s walled ecosystem, the software layer of the smart home is being written substantially in China.

One honest caveat. Tuya no longer discloses a single headline “devices powered” figure in its recent filings, so its reach is best evidenced by its developer and customer counts rather than a device number; older device-volume claims should be treated with care.

How this reaches a portfolio

The smart-home platform layer is where the value in connected hardware quietly accrues, recurring, sticky, and largely invisible to the end buyer, and China occupies it from both directions: Tuya as the neutral operating system for everyone else’s devices, Xiaomi as the dominant single-vendor ecosystem. For investors that platform position is more durable than any individual gadget, because it captures a slice of every device that runs on it. It also carries the sector’s recurring tension: these platforms aggregate intimate household telemetry into China-linked clouds, which makes them, like the modules beneath them, both a strong business and a standing security question. The hardware is visible; the operating system underneath it is where the leverage lives.