Tencent Executive Elaborates on AI Strategy: More Domestic Chips Supply in H2, C-end Monetization Still in Early Stage

On May 14, according to The Paper, during a conference call discussing AI-related expenditures, Tencent executives stated that they are seeing an increase in demand for AI-related services from both internal products and external model users. “We previously guided that capital expenditures this year would increase compared to last year, and we are now more confident in this guidance. We expect significant increases in capital expenditures, with more domestic AI chips being supplied month by month in the second half of this year.” Regarding the returns on AI products, Tencent President Liu Chiping mentioned that model training is essentially an investment in the future and may not yield immediate returns. However, over time, capabilities will accumulate and help unlock various business opportunities. On the performance of C-end services, Liu believes that in Western markets, the penetration rate of paid services is very high, and consumption levels are elevated. Subscription prices in Western markets are several times higher than those for equivalent services in China, whether for music or video services. The paid penetration rate in China is roughly in the single digits. When applying this to the Chinese market, based on a subscription model, the scale is not as large. When a service must be supported through payment, it is unlikely to be a winner-takes-all business; there will be multiple participants in the market, each holding a certain market share and subscription volume. Additionally, regarding e-commerce or advertising as monetization methods, “we have considered this, but it is still in the early stages. Even in the U.S. market, where eCPM is much higher, leading players have yet to launch very mature advertising models.” (Dongxin News Agency)