Tencent has reduced the speed of its GPU deployment after the implementation of DeepSeek, which has enhanced productivity in training large language models. The company reported a capital expenditure of CN¥76.8 billion for FY 2024, more than three times its 2023 spending, focusing on areas like advertising and gaming that yield substantial returns. CEO James Mitchell noted that Tencent's 2025 capex will represent a low teens percentage of revenue, projecting growth yet spending less compared to major Western counterparts like Microsoft and Amazon.
Tencent's capital expenditure on GPUs mostly goes towards its advertising and games businesses, which both deliver strong returns.
That period of time ended with the breakthroughs that DeepSeek demonstrated, leading to much higher productivity on large language model training from existing GPUs.
Since Q4 2024, the company 'stepped up our purchase of GPUs' and believes they will 'accelerate the revenue growth of our overall cloud services.'
Mitchell believes Tencent is spending more than any other Chinese tech company, which he thinks all have lower capex than Western peers.
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