Tencent Eyes AI Shift Amid Gaming Revenue Decline; Hunyuan and AI Leadership Ambitions in Focus
Summary:
Facing declining revenues in its historically profitable gaming sector, Chinese tech giant Tencent signals a strategic shift towards artificial intelligence (AI) technologies. Despite the firm's lagging position in the AI industry, Tencent's CEO mentions their potential to compete with first-tier companies. This transition is partially banked on the success of Hunyuan, a large language model launched in 2023. Considering the global dominance of OpenAI and Nvidia in the AI field, the feasibility of China's ambition to lead the global AI market by 2030 remains uncertain.
Tencent, the top-rated firm in China, has hinted at joining its American counterparts in pivoting its attention to artificial intelligence (AI) projects in the future. This announcement emerges amidst declining earnings in the gaming sector of the 25-year-old tech giant — a department that, historically, has been the source for almost a third of the company's profits. In 2018, the gaming sector in China generated a whopping $16.9 billion through various deals, as per a report by The Verdict. There was a drop to $10.3 billion in 2020 and, as of 2023, the figure stood at a mere $158 million. Tencent, the renowned publisher of globally popular games like PUBG and Honor of Kings, has witnessed a substantial dip in gaming revenues. At an annual business event in China on 29th January, Tencent's CEO Pony Ma labeled gaming as the organization's "primary business", but also highlighted "considerable challenges" over the previous year. Pony Ma conceded to Tencent's trailing position against Chinese rivals in the gaming industry in a translation published by Seeking Alpha: "We have been outpaced, our competitors are continually launching fresh products, and we feel as if we have made no progress." In light of dwindling profits, Pony Ma seems to hint at the corporation's plan to shift more attention to artificial intelligence (AI) technologies. He admitted that Tencent is not presently seen as the industry frontrunner in AI, but he also stressed that they are not far behind their competitors. "We can keep up with the premier companies now," he remarked. The AI aspirations of the organization could largely depend on Hunyuan, a large language model (LLM) that is being positioned as an internal rival to OpenAI’s ChatGPT. Tencent introduced Hunyuan for corporate use in September 2023, and it swiftly ascended to become one of the top models in the country, alongside Alibaba's Tongyi Qianwen and Baidu's Ernie Bot. Prior to ChatGPT’s debut, China's aim was to become a worldwide leader in artificial intelligence by 2030. However, considering the present global market control of OpenAI and Nvidia’s role as the hardware champion in the AI race, it remains uncertain whether China's aspirations are achievable.
Published At
1/30/2024 8:30:00 PM
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