Tencent AI spending hits $4.4 billion as DeepSeek pauses funding
Two very different pictures of China’s artificial intelligence race are coming into focus at the same time. Tencent, the roughly $500 billion conglomerate behind WeChat and one of the world’s largest gaming businesses, just posted another quarter of solid growth. Meanwhile DeepSeek, the AI startup that stunned the industry with cheap, high-performing models, has quietly paused its fundraising as the cost of running its own infrastructure spirals faster than planned. The contrast says a lot about where Tencent AI spending stands compared with smaller, more exposed players trying to keep pace in the same market.
Key takeaways
- Tencent’s Q1 2026 revenue hit RMB 196.5 billion, up 9% year-over-year, according to results released May 13.
- Core operating profit, excluding new AI products, jumped 17% to RMB 84.4 billion, while net profit landed between RMB 58.1 billion and RMB 69.8 billion.
- Tencent’s AI capital expenditure reached RMB 31.9 billion (roughly $4.4 billion) in the first quarter alone, with management signaling a bigger increase for the second half of 2026.
- DeepSeek raised about $7.4 billion, pushing its valuation past $50 billion as of June 2026, but has since paused follow-on fundraising as data center costs outrun projections.
- US chip export restrictions are pushing Chinese AI labs toward older hardware, domestic alternatives, or costly workarounds.
Tencent’s robust financial performance underpins aggressive AI investment
Tencent’s latest numbers show a company using its cash-generating core businesses to bankroll a much bigger AI bet. The company’s Tencent financial results for the first quarter of 2026, released on May 13, came in below some analyst expectations on the top line but told a stronger story underneath.
… Continue reading the full article at the original source below.
