China-based tech giant Tencent has announced intentions to release a proprietary artificial intelligence (AI) model later this year, which it says will be among the finest in the nation.
This is an early indication that Tencent wants to compete in the sector with established players like Baidu and SenseTime.
China's 'Best' AI Model Soon to Launch
While discussing the AI phenomena after the release of financial results, Tencent executives remarked favorably on the company's success in building a massive language model to fuel generative AI and other applications, as reported by Bloomberg.
The gaming giant is said to be lagging behind its local competitors, in part because it has been relatively quiet about its progress. Hunyuan, its model, has been put through its paces with applications like cloud computing and search.
On Wednesday's results conference, August 16, Tencent President Martin Lau remarked, "It's among the top leading foundation models produced in China. We are very relentlessly working on the upgrade and iteration to prepare it for launch at some point of time in the latter part of this year."
Tencent has said that its AI research and development extends much beyond the scope of chatbots like OpenAI's ChatGPT.
The Chinese firm is experimenting with AI for use in online games, cloud storage, and the financial sector. It also believes it can utilize technology to strengthen marketing efforts.
"AI, the more we look at it, the more excited we are about it as a growth multiplier for our business. We look at the opportunity and technology much more broadly than just a chatbot and Q&A type of experience," Lau stated.
In the cloud area, Tencent is reportedly building a marketplace for corporate customers where they can pick and select generative AI-powered services, which will convert into high-margin profit for the firm.
Revenue Growth That's Less Than Expected
Tencent posted a weaker-than-expected second-quarter earnings jump on Wednesday as cost-cutting tactics paid off and revenues grew across its divisions.
According to CNBC, the revenue came to 149.21 billion yuan ($20.46 billion), up 11% from 151.73 billion yuan ($20.80 billion) projected. Company equity holders earned 26.17 billion yuan ($3.6 billion) versus 33.42 billion yuan ($4.6 billion). This is up 41% year-over-year.
Tencent is seeing the results of its cost-cutting campaign last year when it divested non-core sectors and slashed marketing expenditure. The firm, which controls WeChat, is also seeing growth in gaming and cloud computing.
This transformation, along with diligent cost restraint from the prior year, led to profit growth outpacing sales growth.
The tech firm has posted three consecutive quarters of revenue growth as it returns from a rough 2022. Notably, its primary gaming industry dropped substantially compared to 2021, when the virus forced people to stay inside their homes. Moreover, Chinese officials halted new game clearance for months until April 2022. Tencent games were only approved by authorities after many months.
