Chinese tech giant Tencent’s Q2 profit down as AI push builds

Chinese tech conglomerate Tencent reported a quarterly net profit on Wednesday that fell short of analysts' expectations, as the company continues to invest heavily in artificial intelligence. Based in Shenzhen, Tencent is the developer and operator of the widely-used WeChat app, which boasts over a billion users. The firm has been positioning itself as a major player in the AI sector alongside fellow Chinese tech giants Baidu and Alibaba.

WeChat users and observers are eagerly awaiting the potential debut of an AI agent directly integrated into the app. Despite a 4% decline in profit from the previous quarter, Tencent's revenue surged 11% to reach 204.8 billion yuan. The company attributed its progress towards building a new, AI-driven business model to advancements in intelligence, applications, and infrastructure.

Tencent's chairman, Pony Ma, has previously criticized past AI initiatives, comparing them to a "leaky ship" and expressing the firm's desire to accelerate its progress. The company is also reportedly in talks to regain stakes in AI startup Manus, which was recently blocked from being acquired by Meta.