Tencent Pushes Forward on AI Despite U.S. Chip Curbs
Tencent Holdings Ltd. is deploying the high-performance chips it stockpiled in response to the U.S.’ sweeping tech export controls on its revenue-generating businesses, President Martin Lau said, in a sign the Chinese internet behemoth is making a bigger bet on artificial intelligence (AI) to drive growth.
Over the past several months, Tencent has trained its large language models (LLMs) on “a smaller cluster” of graphics processing units and has “achieved very good training results,” freeing up more computational resources for the LLMs’ future iterations, Lau said on a post-earnings call Wednesday.
The Shenzhen-based giant has also saved computational resources by enhancing AI inference efficiency and using homegrown alternatives to chips subject to the export restrictions, Lau said.
In the first quarter of this year, Tencent integrated DeepSeek’s reasoning model R1 and its in-house developed large model Hunyuan T1 into its AI chatbot Yuanbao, with plans to add more customized features to expand the user base of Yuanbao, which the company aims to build into an AI agent.
Tencent has doubled down on the development of large models that power advanced AI. Last month, the company completed an organizational shakeup to accelerate the development of LLMs and multimodal models as part of a broader strategy to roll out AI capabilities across its portfolio of consumer-facing apps including its ubiquitous messaging app WeChat.
On Wednesday’s call, Lau reiterated the importance of Tencent’s “AI in All” strategy, stressing that the technology helped increase its advertising revenue by delivering ads more accurately. With the help of AI, the click-through rate for certain ads has risen to around 3%, compared with 0.1% for traditional banner ads and 1% for feed ads, Tencent’s Chief Strategy Officer James Mitchell said.
In addition, AI has played a role in improving video games. According to Mitchell, Tencent has used AI to help coach new players and prevent cheating and hacking — particularly in large competitive multiplayer games. More generative AI technology will be applied to Tencent games driven by content, Mitchell said.
Despite its aggressive AI push, Tencent may have a harder time in the future accessing computing chips, including those made by domestic companies. On Tuesday, the U.S. government issued guidelines stating that the development and production of Huawei’s most advanced Ascend chips are “likely” in violation of U.S. export controls, with any person or company using the Huawei chips without a license likely to face penalties.
Contact reporter Ding Yi (yiding@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
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