Tencent Speeds AI Spending After Sales Grow Fastest in Years

Revenue roseate a better-than-projected 11% to 172.5 cardinal yuan ($23.8 billion) for the 3 months ended December, portion nett income astir doubled. The institution besides unveiled plans to bargain backmost astatine slightest HK$80 cardinal worthy of shares and projected a 32% hike successful its yearly dividend for 2025. Shares successful Prosus NV, a large shareholder, climbed much than 2% successful Europe.

Tencent sketched retired a much measured attack to artificial quality than arch-foe Alibaba Group Holding Ltd., which past period declared it was going all-in connected AI development. Billionaire laminitis Pony Ma described however Tencent made the “careful consideration” to trust connected some in-house and open-sourced models — successful overmuch the aforesaid mode it publishes some its ain and third-party games.

Tencent intends to commercialize AI by beefing up services specified arsenic advertizing and WeChat, portion spending connected probe to support gait with Alibaba and DeepSeek, whose emergence successful January galvanized planetary AI development. Tencent plans to give a low-teens percent of its 2025 gross toward superior expenditures, including connected AI infrastructure — much than $10 billion, based connected analysts’ projected income this year.

“AI is really successful a precise aboriginal stage, truthful it’s truly hard to speech astir what the eventual authorities would look like,” President Martin Lau told analysts connected a post-results briefing. But each of Tencent’s consumer-facing applications “will proceed to germinate into a precise utile and adjacent much almighty merchandise to users.”

Tencent ramped up its purchases of AI chips successful 2024’s last 4th to service accrued demand, which should construe into faster unreality gross growth, executives said. The institution is moving astir US restrictions connected the astir almighty Nvidia Corp. semiconductors. Chief Strategy Officer James Mitchell said DeepSeek nevertheless has demonstrated however it’s imaginable to execute breakthroughs for less, and Tencent itself was prioritizing “high-value” usage cases.

Click present for a liveblog connected the results.

Tencent is among the large Chinese tech names to study this week, wrapping up a intimately watched net play for a trillion-dollar assemblage that’s rounding a corner.