Chinese tech company Xiaomi has announced investment of one billion U.S. dollars to build up business in online video.

The move comes as tech giants around the globe scramble to expand their video businesses, seen as a vital driving force in cyber connectivity.

Lei Jun, CEO of the Beijing-based smartphone maker, says Xiaomi will form an association with video-sharing websites and film makers, but the company will not make content itself.

Xiaomi, one of the world's most valuable tech companies, worth 45 billion U.S. dollars, hopes to gain an edge through about 100 million Xiaomi devices that stream video.

Xiaomi was the second largest smartphone manufacturer in China with 13.5 million smartphones shipped in the first quarter this year, trailing Apple, whose shipments stand at 14.5 million.