China’s Tencent Profit Slips Amid Heavy AI Investment
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Beijing: Tencent Holdings, China's internet behemoth, announced a 0.7% year-on-year decrease in second-quarter net profit to 56 billion yuan ($7.8 billion), as substantial investment in artificial intelligence dragged on earnings.
Despite the reduction in profits, sales increased by 11% to 204.8 billion yuan, due to strong advertising and gaming sectors. However, the performance fell short of analysts' profit projections of 61.8 billion yuan.
Tencent boosted capital investment to 52.8 billion yuan in Q2 from 31.9 billion yuan in Q1 as it expanded AI infrastructure and developed products such as the Hunyuan model and WeChat's AI helper.
Marketing services income increased 22% to 43.6 billion yuan, while fintech and business services gained 9%, aided by surging demand for AI-related cloud services.
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