Tencent is switching to artificial intelligence. Why? Because gaming profits are falling – key information

• Tencent, a leading Chinese company, is beginning to focus on artificial intelligence (AI) in 2024, responding to a dramatic decline in profits from the gaming sector, which has been a major source of revenue until now.
• A report by The Verdict shows that China’s gaming sector has experienced a significant decline in the value of transactions, affecting profits for Tencent, maker of such global hits as PUBG: Battlegrounds and Honor of Kings.
• Tencent CEO Pony Ma acknowledged that the company has faced serious challenges in the gaming sector. Now Tencent is setting its sights on development in artificial intelligence, introducing the Hunyuan model to catch up and compete with global players such as ChatGPT OpenAI.
• Despite China’s ambitious plans to become the world leader in artificial intelligence by 2030, the dominance of OpenAI and Nvidia calls into question the feasibility of these goals, leaving the question of whether China will be able to maintain its ambitions in the face of the current market situation.

Tencent’s shift to artificial intelligence in response to gaming crisis

In response to waning gaming profits, Tencent has announced a shift in its efforts toward artificial intelligence. CEO Pony Ma admitted that the company is not currently a leader in the industry, but plans to catch up. Tencent launched the Hunyuan model in 2023, competing with ChatGPT’s OpenAI models. While China’s ambitions in artificial intelligence are clear, the question remains whether, with the current dominance of OpenAI and Nvidia, China will be able to meet its goals of becoming a global leader in the field by 2030.

Tencent released its own ChatGPT counterpart in 2023, heralding a shift in strategy. The leading Chinese company, previously known for its dominance in the gaming sector, began focusing on artificial intelligence (AI) in 2024. The decision follows a drastic decline in gaming revenue, which had previously been a key business area for the 25-year-old technology corporation.

Challenges for China’s gaming sector

According to a report by The Verdict, China’s gaming sector saw transactions worth $16.9 billion in 2018, but that dropped to $10.3 billion in 2020, until finally reaching only $158 million in 2023. Tencent, maker of global blockbusters such as PUBG: Battlegrounds and Honor of Kings, experienced a significant drop in revenue from the sector. Tencent CEO Pony Ma, at an annual corporate event in China in January, described games as the company’s flagship business, but noted that the company faced serious challenges last year.

Tencent bets on artificial intelligence with Hunyuan model

In response to waning gaming profits, Tencent has announced a shift in its efforts toward artificial intelligence. CEO Pony Ma admitted that the company is not currently a leader in the industry, but plans to catch up. Tencent launched the Hunyuan model in 2023, competing with ChatGPT’s OpenAI models. While China’s ambitions in artificial intelligence are clear, the question remains whether, with the current dominance of OpenAI and Nvidia, China will be able to meet its goals of becoming a global leader in the field by 2030.