How AI investments are paying off for Chinese tech conglomerate Tencent

Tencent CEO Pony Ma says strategic AI investments ‘create value for users and society’, while generating substantial returns for the firm

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Tencent Holdings’ artificial intelligence capabilities have made tangible contributions to its businesses. Photo: Shutterstock

Published: 6:00pm, 15 May 2025

Tencent Holdings, which operates the world’s largest video gaming business by revenue and Chinese super app WeChat, is seeing its investments in artificial intelligence (AI) pay off, as the Shenzhen-based firm posted its best quarter on record since listing in Hong Kong in 2004.

That assessment was highlighted by Tencent co-founder, chairman and chief executive Pony Ma Huateng on Wednesday after the country’s most valuable technology company – with around US$600 billion in market capitalisation – reported better-than-expected financial results in the first quarter from a year earlier, as revenue rose 13 per cent and profit grew 14 per cent.

“AI capabilities already contributed tangibly to businesses, such as performance advertising and evergreen games,” Ma said. “We expect these strategic AI investments to create value for users and society, and generate substantial incremental returns for us over the longer term.”

Tencent has stepped up investments on AI opportunities amid the rapid developments in the field being pursued by internet peers like Alibaba Group Holding, Baidu and ByteDance, as well as innovative start-ups such as DeepSeek. Alibaba owns the South China Morning Post.

On Thursday, Tencent’s cloud computing unit said in a social media post that using a large language model (LLM) – the technology underpinning generative AI services like ChatGPT – has helped build smarter non-player characters (NPCs) for BUD, a user-generated open metaverse game and 3D interactive platform from Shenzhen-based studio Point One.

Powered by Tencent’s Hunyuan AI model, NPCs in BUD do not stick to a fixed narrative. These characters can be programmed to quarrel with each other and react to players’ actions, the post said.

A similar collaboration was announced last month between Tencent Cloud and Giant Network Group, creator of social deduction game Space Party. The game had about 7 million AI-generated characters with “independent logic chains” powered by Tencent’s fast-reasoning AI model, Hunyuan Turbo S.