Chinese internet and tech giant Tencent posted stronger-than-expected revenue growth in the first quarter, driven by robust performance in its gaming division and deepening investments in artificial intelligence (AI). Revenue for the company, China’s largest by market capitalisation, climbed 13 percent from a year earlier to RMB180.02 billion ($24.98 billion) topping analysts’ expectations.
Domestic gaming revenue jumps 24%
For the quarter, the company’s net profit rose 14 percent from the corresponding period to RMB47.8 billion. Meanwhile, domestic gaming revenue rose 24 percent from a year earlier, while international gaming grew by 23 percent for the Shenzhen-based conglomerate, which operates China’s biggest messaging app WeChat and ranks among the world’s largest gaming companies.
Markete services revenue for the period rose 20 percent compared to the corresponding period to reach RMB31.9 billion. Tencent attributed this to “robust advertiser demand” for its video, search and Mini Program product within WeChat. Mini Programs are apps that are hosted within WeChat.
The upbeat results reflect Tencent’s dual focus on core business growth and innovation in emerging technologies, particularly AI. The company noted that artificial intelligence is already making a “tangible” impact across key segments, including performance advertising and long-cycle gaming titles. “We have increased investments in new AI opportunities,” the company said, highlighting recent enhancements within the WeChat ecosystem.
Tencent ramps up AI investment
Tencent is among a growing list of Chinese and global tech firms accelerating efforts in AI development following the unexpected emergence of DeepSeek’s chatbot in January. DeepSeek made waves earlier this year with an advanced chatbot reportedly developed at a fraction of the cost incurred by Western counterparts such as OpenAI. In response, Tencent has initiated trials of its own AI model, which it says can surpass DeepSeek’s offering in performance.
Last year, China’s tech giant reported an 8 percent increase in third-quarter revenue, driven by a strong rebound in its gaming business. However, the company’s fintech sector faced headwinds, reflecting broader economic challenges in China. For the quarter ending September 30, posted revenue of 167.19 billion yuan ($23.14 billion), slightly below analyst expectations of 167.8 billion yuan, according to LSEG data.
In other news, in December, two directors appointed to Epic Games by Tencent, resigned from the Fortnite creator’s board following concerns raised by the US Department of Justice (DOJ). The resignation came in the wake of an ongoing antitrust investigation questioning the legality of their positions on both Epic Games and Tencent’s boards.
