China’s Firm Shifts To AI As Profits From Gaming Decline

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    Pony Ma, Tencent's co-founder and CEO, said that although the company's video game division faces fierce competition, it is making progress in the development of artificial intelligence.

    Tencent, China's most valuable company, has signaled it will follow the lead of its Silicon Valley peers and shift its focus to artificial intelligence (AI) projects in the future.

    The announcement also coincides with a decline in sales at the 25-year-old tech giant, which has historically generated about a third of the company's profits.

    Tencent era

    according to report According to The Verdict, China's gaming industry conducted transactions worth $16.9 billion in 2018. In 2020, transactions decreased to $10.3 billion and in 2023 to $158 million.

    However, Tencent, the publisher of global git games PUBG: Battlegrounds and Honor of Kings, saw a significant decline in gaming profits.

    On January 29, Tencent CEO Pony Ma mentioned that gaming is the company's main business. He also made the remarks at an annual corporate event in China, warning that China had faced significant challenges over the past year.

    Chinese media identified Pony's speech as underscoring Tencent's struggle to maintain its top position in China's high-tech industry amid fierce competition and emerging technologies. Additionally, Pony expressed concern about Tencent's recent gaming performance. He said newly released games have not met expectations.

    Other Chinese developers

    Chinese developers like miHoYo and NetEase Inc. gained popularity with titles like Genshin and Eggy Party. They overshadowed Tencent's famous hits such as “Honor of Kings”.

    Pony further pointed out that Tencent has made great strides in artificial intelligence (AI) and is now in line with major companies. Mr. Pony also emphasized the integration of Tencent's “Hunyuan” AI model into various aspects of the business. This increases efficiency by not rushing AI into product development.

    According to recent reports, China has approved more than 40 AI models for public use in the past six months. However, Pony does not expect significant AI-based applications to emerge in the coming years.

    Pony will also focus on the potential of live streaming e-commerce and aim to develop Tencent's stable platform, WeChat, with a large user base and ecosystem, and new companies like ByteDance's platform, Douyin. We tried to find a growth channel.

    Importantly, Tencent has invested approximately $890 million (6.42 billion yuan) to acquire more than 70,601 square meters of land in Beijing's Haidian District, providing concentrated office space for more than 12,000 employees. provided.

    artificial intelligence

    As a result, Pony has indicated its intention to focus more on AI technology in response to declining profits. The CEO acknowledged that Tencent is not currently the leader in the AI ​​industry, but added that the company is not far behind its competitors. He pointed out that the company is finally able to keep up with the pace of leading companies.

    Additionally, the company's AI aspirations may rely primarily on Hunyuan, a large-scale language model that positions itself as a regional rival to OpenAI's ChatGPT.

    In September 2023, Tencent launched Hunyuan for enterprises.I immediately stood up to join in. Alibaba's Tongyi Chengwen and Baidu Ernie Bot As the most popular model in the country.

    Even before ChatGPT, China had set a goal of becoming the world leader in AI by 2030. However, given OpenAI's current global market dominance and NVIDIA's position as the hardware leader in the AI ​​race, it is unclear whether China's goals are still achievable.


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