"The company's games are popular around the world, and its video platforms attract huge audiences and advertising revenue. The company's public cloud has a ten percent share of the Chinese market. The company has invested heavily in AI to power its services and in its earnings announcement reported the tech is "benefitting us in business areas such as ad targeting and game engagement, as well as in efficiency enhancement areas such as coding, and game and video production.""
"Comparable companies like Meta, Google, Amazon, and Microsoft report similar outcomes from adopting AI and then say they'll achieve even better business outcomes by ramping their spending on AI infrastructure - which already top $10 billion a quarter - for the next few years. Tencent, by contrast, reported Q3 capex of RMB13 billion ($1.9 billion), down 31 percent compared to the previous quarter and 23 percent year-over-year."
Tencent operates messaging and e-commerce apps with over a billion monthly users, global games, large video platforms, and a public cloud with about a ten percent Chinese market share. The company invested heavily in AI, reporting benefits in ad targeting, game engagement, coding efficiency, and game and video production. Q3 capital expenditure was RMB13 billion ($1.9 billion), down 31 percent quarter-on-quarter and 23 percent year-on-year, and executives expect further capex declines due to AI chip availability changes and GPU supply chain constraints. Tencent has sufficient GPUs for internal operations but cannot always rent accelerators to cloud clients. Q3 revenue reached RMB192 billion, up 15 percent year-on-year, and gross profit rose 19 percent.
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