China’s most valuable company is turning to AI as gaming profits decline.
China's most valuable company, Tencent, has signaled that it will shift its focus to artificial intelligence (AI) efforts, along with its Silicon Valley partners.
The news comes amid declining revenue for the 25-year-old tech behemoth's gaming division — a segment that accounts for nearly a third of the company's profits to date.
peaks and valleys
China's gaming industry It did $16.9 billion in deals in 2018, according to The Verdict. It drops to $10.3 billion in 2020 and $158 million by 2023.
Tencent – which owns global hit games PUBG: Battlegrounds and Honor of Kings, among others – saw a sharp decline in gaming revenue.
Speaking at an annual corporate event in China on January 29, Tencent CEO Pony Ma called games the company's “flagship business” but warned that it faced “significant challenges” last year.
According to a translation published by Seeking Alpha, the CEO acknowledged Tencent's lagging position among Chinese competitors in the gaming sector:
“We find ourselves at a loss, as our competitors come up with new products and make us feel like we've accomplished nothing.”
Artificial intelligence
In response to declining profits, Ma appears to be willing to shift more focus to AI technologies.
The CEO said that Tencent is not currently considered an industry leader in AI, but added that the company is not that far behind its competitors. “Finally, we can follow the pace of first-tier companies,” he said.
The company's AI ambitions may ride on the shoulders of Hanyuan, a large language model positioned as a local competitor to OpenAI's ChatGPT.
Related: US sanctions over China's military use of Baidu chatbot could spell bad news for AI industry
Tencent launched Hanyun for enterprise use in September 2023. He quickly became one of the country's most popular models, along with Alibaba's Tongqi Qiaowen and Baidu's Ernie Bot.
Before ChatGPT was created, China It has set a goal of becoming a global leader in artificial intelligence by 2030. But with OpenAI's current global market dominance and Navid's position as the hardware leader in the AI race, it's unclear whether China's ambitions will continue to materialize.
