Tencent Shifts Focus to AI Amid Gaming Profit Decline

Tencent shifts focus to AI as gaming profits dwindle. CEO Pony Ma acknowledges challenges in the gaming sector and outlines the company's strategic move toward artificial intelligence, with Hunyuan leading the way.

  • Chinese Gaming Decline: Tencent faces challenges as revenues from its gaming sector decline, dropping from $16.9 billion in 2018 to $158 million in 2023.

  • Shift to AI Focus: Tencent’s CEO Pony Ma signals a strategic shift towards artificial intelligence (AI) technologies due to significant challenges in the gaming sector.

Gaming Downturn

Amid a substantial decline in the Chinese gaming sector, Tencent, China’s tech giant and global gaming publisher, reported a significant drop in gaming revenues. The once lucrative gaming sector, responsible for nearly one-third of Tencent’s profits, faced challenges as deals plummeted from $16.9 billion in 2018 to a mere $158 million in 2023. Speaking at an annual event, Tencent CEO Pony Ma acknowledged the hurdles faced in the gaming domain, expressing concern over lagging behind competitors who continue to innovate.

Tencent’s AI Pivot

In response to the gaming sector’s struggles, Tencent’s CEO Pony Ma outlined the company’s strategic pivot towards artificial intelligence (AI). While admitting that Tencent currently trails industry leaders in AI, Ma expressed confidence in catching up with first-tier companies. The cornerstone of Tencent’s AI endeavors seems to be Hunyuan, a large language model positioned as a local competitor to OpenAI’s ChatGPT. Launched in September 2023, Hunyuan has swiftly gained popularity, becoming one of China’s favored AI models.

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