S&P Global Ratings anticipates that Tencent's commitment to AI and its core business could lead to notable improvements in competitiveness. The company plans to invest over CNY80 billion ($11 billion) annually in capital expenditure (capex) for the next two years, significantly increasing its AI-related spending and procurement of AI chips. With Q4 capex representing 12% of revenue, this strategy is already yielding positive impacts, such as enhanced advertising efficiency and improved online gaming revenue. Tencent's newly introduced AI reasoning model, HunYuan T1, is also gaining attention for its competitive capabilities.
Capex surged more than threefold to CNY76.8 billion in 2024, accounting for 12% of total revenue, compared to 4% in 2023.
S&P Global Ratings anticipates Tencent’s AI investments to generate positive cash flows through targeted ads and improved game development.
President Martin Lau indicated plans to increase 2025 capex, projecting it to represent a low teens percentage of revenue.
Tencent’s new AI model, HunYuan T1, competes effectively with DeepSeek's R1, emphasizing competitive advancements in AI technology.
Collection
[
|
...
]