Tencent's Dual-Engine Strategy: AI Innovation and Global Expansion

A Tale Of Two Engines: Meet The New Tencent

At the fifth Tencent Cloud Global Industry Analyst Conference and the 2025 Global Digital Ecosystem Summit in Shenzhen, Tencent made its strategic direction clear: the company is accelerating two engines to drive future growth. First, AI is positioned as the intelligent engine, enabling productivity and innovation across industries. Second, globalization serves as the expansion engine, bringing Tencent Cloud's advanced capabilities to enterprises worldwide through localized, sovereign-infrastructure, compliance, and strategic partnerships. These dual priorities signal Tencent's ambition to evolve from a domestic cloud leader into a global AI-cloud platform provider that helps businesses innovate faster while meeting critical requirements for digital sovereignty and ecosystem integration. AI: From Model Race To Usable Agentic and Physical AI Chinese cloud leaders are pivoting from headline model benchmarks to production‑grade, agent‑driven AI that plugs directly into enterprise workflows and sovereignty‑ready stacks. Tencent casts this pivot as an intelligent engine and opens its AI capabilities via Tencent Cloud so customers can turn AI from a concept into measurable productivity. The company paired model advances with toolchains for development, deployment, observability, and governance. This signals a pragmatic phase focused on cost, reliability, and integration into SaaS and data estates rather than one‑off demos. Major announcements on AI include: * Agentic stack, end to end. Tencent introduced its Agent Development Platform (ADP) to accelerate real‑world agent building with LLM and RAG, workflow, and multi‑agent patterns. The new Agent Runtime provides five core capabilities: execution engine, cloud sandbox, gateway, context, and observability with enterprise readiness. For example, its sandbox is able to start in about 100 ms and scale to hundreds of thousands of concurrent agents. Cloud Mate, an expert service agent, has reportedly intercepted 95% of risky SQL and cut troubleshooting from 30 hours to about 3 minutes in internal practice, directly addressing the reliability and ops debt concerns that stall AI in production. * Agentic AI at scale for usability. Tencent embedded agentic AI features into its collaboration and AIOps software Yuanbao. Its genAI chatbot now connects with Tencent Meeting, Tencent Docs and other apps. Tencent Meeting added real‑time AI minutes, driving a 150% YoY increase in AI users. LeXiang Knowledge Base supports 102 content formats with reported 92% QA accuracy, and CodeBuddy fuses product‑to‑deployment workflows such that, at Tencent, about 50% of new internal code is AI‑generated and coding time fell by 40%. The throughline is "usable AI" that multiplies throughput in meetings, knowledge retrieval, legal review, and software delivery without forcing teams to switch tools. * Foundation model upgrades for 3D. Transformer architecture is driving next-generation advances in computer vision. Diffusion Transformer (DiT), a new class of generative models, combines diffusion models with transformer architecture, taking this evolution to the next level. The Hunyuan 3D 3.0 foundation model adopts a hierarchical sculpting approach for 3D‑DiT to improve modeling accuracy and geometric resolution, marking a significant advancement in 3D modeling technology. Over the past year, Hunyuan released more than 30 models and embraced open source; downloads of the 3D series surpassed 2.6million, pointing to strong developer uptake for digital twins, gaming assets, and immersive commerce. * Tairos platform ecosystem for embodied intelligence. Tencent unveiled Tairos, its embodied intelligence platform, marking its entry into the physical AI domain. Tairos acts as the "AI brain" for humanoid robots and other embodied systems, offering robotics developers advanced perception, motion planning, and human‑machine interaction capabilities. The platform integrates simulation environments, cloud‑based control, and large‑model reasoning to accelerate robotics development. By working with leading humanoid vendors like Unitree, KEENON, and AgiBot, Tencent's robotic offering has the potential to enable industries such as manufacturing, logistics, and services to deploy intelligent, adaptive machines at scale. Globalization: From Infrastructure Expansion To Sovereign Cloud Chinese tech vendors have built comprehensive solutions and practices for tech self-reliance in the last decade during the ongoing geopolitical frictions with US, and now expanded geopolitical tensions are putting digital sovereignty center stage for enterprises worldwide. The next phase of globalization among Chinese vendors is to apply these experiences overseas systematically: building regional infrastructure, aligning with local compliance, packaging operational playbooks, and serving through partner‑led motions. Tencent's globalization engine upgrades its offerings across infrastructure, products, and services. Overseas clients can adopt full-stack cloud and AI on local terms, with regional data handling and support to meet sector‑specific needs. Major moves include: * A two-pronged global expansion strategy. Abroad, the company operates a dual strategy: powering Chinese giants like NIO, Honor, and leading gaming firms as they expand internationally, while simultaneously partnering with local companies like Japan's Vector Inc. to create region-specific solutions. In Japan, Tencent Cloud enabled Vector to develop AI-generated avatar campaigns crafted specifically for Japanese cultural preferences. This two-pronged approach positions Tencent as both a bridge for Chinese digital expansion and a catalyst for local innovation abroad. Success depends on mastering four critical factors: partnership depth, brand trust, culturally-attuned execution, and sales velocity. Execute well on both fronts, and Tencent will become a essential platform for digital transformation, whether companies are going global or going local. * Footprint and edge acceleration. Tencent plans US$150 million for its first Middle East data center in Saudi Arabia and a third Japanese facility in Osaka plus a new office, while maintaining nine global technical support centers across APAC, Europe, and the U.S. At the edge, EdgeOne Pages ties large models to MCP Server so developers can stand up a complete localized e‑commerce presence, including registration, payments, acceleration, and security, in minutes. Tencent says the service surpassed 100,000 users in three months, and it signals demand for AI‑accelerated, locality‑aware web operations. * International product line upgrades. Tencent Cloud delivered globalized editions of ADP, CodeBuddy, Cloud Mall (omnichannel commerce), Starry Sea servers, TDSQL databases, Tencent Cloud Enterprise (TCE), and the EdgeOne security with acceleration platform. The stated goal is compatibility with mainstream global stacks and developer tooling, lowering integration effort and compliance frictions for customers that run heterogeneous environments. For builders, these releases mean faster agent development, secure deployment at the edge, and smoother data residency controls. It will turn Tencent's domestic learnings into exportable, localized product suites rather than one‑size‑fits‑all bundles. On the sovereignty front, TCE comes with the same source code of the public cloud solution and allows customers to store their data in their own data centers. Furthermore, the offering is hardware agnostic, meaning that customers can go with their hardware of choice. * A eKYC solution best seller. The digital economy has transformed know-your-customer (KYC) process from paper-based to digital-based such as biometric identity verification. However, AI-driven deepfake attacks now pose a significant threat to eKYC (electronic KYC) integrity. Banks, e-commerce platforms, and brands are urgently seeking robust countermeasures. Tencent's AI Face Shield offers a semantic-based, self-learning facial recognition system. It adapts in real time to evolving attack patterns, enhancing detection and resilience. The solution has processed over 20 billion transactions and blocked 10 million attacks worldwide. It is now a top-selling product in Tencent Cloud's global portfolio. A few leading banks and telcos in Southeast Asia have adopted the solution. Forrester anticipates rising deepfake threats, making AI-powered eKYC solution increasingly strategic. Tencent's Southeast Asia Playbook: Activating AI and Globalization for Regional Impact Tencent's Southeast Asia strategy started with leveraging infrastructure to support core verticals like gaming, media, and payments. As digital enterprises in the region shift from rapid growth to demanding measurable returns, Tencent's focus on Thailand and Indonesia targets markets primed for cloud and AI adoption. Post-COVID, Tencent pivoted to building local capabilities, investing in Southeast Asian talent and regional partnerships to deliver solutions tailored to local needs while maintaining global standards. Sustainable growth in Southeast Asia requires more than technical excellence; it demands deep regional expertise and ecosystem development. During the summit, several strategic opportunities emerged for refining Tencent's regional go-to-market approach. These insights reflect both the company's current strengths and the evolving needs of Southeast Asian enterprises as they navigate AI reinvention opportunities: * AI adoption maturity gap. While China is seeing AI-native startups reinvent business models, most Southeast Asian enterprises remain stuck in pilot mode, focused on incremental efficiency rather than business process reinvention. This creates a window for Tencent to lead market education and solution delivery around the "second half of AI" - moving beyond model performance to solving real customer problems and aligning AI with business outcomes. Practical examples, such as industrial inspection agents and security automation, show the potential for systematic, scalable vertical AI. The next 6-9 months will be critical for Tencent to establish itself as the partner that helps organizations bridge the gap between technical AI capabilities and tangible business value. * Trust and governance enhancement. Tencent's strong foundation in operational efficiency and reliability creates an excellent platform for expanding their trust and governance narrative. Their position operating the largest DeepSeek instance globally and their cultural emphasis on "designing for quality versus reactive patching" demonstrate deep technical capabilities. Examples like their AI-assisted product authentication tools hint at sophisticated trust mechanisms that could be further developed into comprehensive governance offerings. As enterprises increasingly prioritize explainable AI and regulatory compliance, there's significant opportunity to evolve these capabilities into structured, productized governance frameworks through platforms like their ADP, complete with versioning, compliance monitoring, and risk management tools. * Geopolitical strategy refinement. Southeast Asia's pragmatic, multi-vendor approach to technology creates opportunities for Tencent to differentiate through sophisticated risk navigation capabilities. While the region values vendor diversity, multinational clients still need expert guidance on asset and risk mapping across multiple jurisdictions with evolving regulatory frameworks. Tencent can leverage their deep infrastructure expertise to develop complementary services around geopolitical risk intelligence, regulatory compliance automation, and cross-border data governance - helping clients navigate supplier relationships, data sovereignty requirements, and compliance matrices with confidence. * Ecosystem development opportunity. Tencent's proven success with digital native firms like Garena and GoTo demonstrates their ability to identify and support transformative companies. Now there's a compelling opportunity to apply this same approach to the next generation: the AI-native startups that will define Southeast Asia's emerging AI computing landscape. By developing programs to identify promising AI-native ventures early and providing them with infrastructure access, technical expertise, and go-to-market support, Tencent can position itself as the preferred partner for the region's most innovative companies while they're still in formation. The Path Forward: Collaborate To Accelerate Innovation And Safeguard Sovereignty To accelerate digital innovation while safeguarding sovereignty, enterprises must go beyond adopting integrated AI platforms, robust agentic AI portfolios, modern data management, and strong AI governance framework. Success requires partnering with AI-native cloud and sovereignty cloud partners to accelerate their AI reinvention. Tencent's Southeast Asia journey highlights a broader industry shift: global hyperscalers must evolve from pure infrastructure providers to true regional innovation partners. While efficiency, reliability, and vertical integration remain foundational strengths, future leadership will depend on building vibrant ecosystems, fostering trust, and delivering customer-centric innovation. After two days of intensive briefings and demonstrations, one thing is clear: hyperscalers that invest in regional ecosystems, talent development, and governance frameworks will capture disproportionate value as agentic and physical AI economies emerge across Southeast Asia and the world. If you'd like to dive deeper set up an inquiry or guidance session with Charlie Dai (AI-native cloud, agentic AI, and humanoids), Dario Maisto (sovereignty cloud), and Meng Liu (enterprise fraud management, identity verification, fintech, security and risk in financial services) for a conversation.

China's Tencent sets out its European ambitions - Summit report and interview

Think of a prominent cloud player in Europe, and Shenzhen, China-based Tencent is not an obvious candidate - at least, not in a world of Microsoft Azure, Amazon Web Services (AWS), and Google, or any of Europe's homegrown alternatives, such as Scaleway or Serverspace. But Tencent has a significant presence on the continent, and its deep experience in social media, chat, gaming, and entertainment gives it a consumer pedigree for any blue-chip brands that are looking for an alternative to US hyperscalers. Now Tencent Cloud wants to grow its international presence - rapidly - and Europe is in its sights as organizations seek long-term partners for digital transformation and AI. The company claims 10,000 enterprise customers in 200 separate markets, and it plans to expand that footprint "responsibly and sustainably" via a policy of internationalization - aka solving local problems - not by globalization. It says: Tencent Cloud is uniquely positioned to help global enterprises grow - leveraging our decade-long, first-hand experience from running one of the world's largest digital ecosystem platforms, WeChat/Weixin, that serves over a billion users, to the largest video gaming ecosystems in the world. WeChat is the messaging app that international phone numbers can use, while the Weixin ecosystem - informally called WeChat in mainland China - is the superapp for over a billion Chinese mobiles. Weixin Pay makes it the nation's payment platform of choice, while a host of mini apps extend functionality into a host of different areas, such as video, games, information, translation, and more, including apps for local and international brands. In the West, Elon Musk has stated his intention to build an 'everything app' around X, but that prospect does not play well in Europe. Musk's strong association with right-wing politics, not to mention X's trust problem with bots, troll farms, and fake accounts (plus the Grok AI being trained on users' data without their consent) make X a challenging prospect in that regard. Would most Europeans want to manage their finances, payments, and daily lives on X? It seems unlikely. But in China, WeChat/Weixin is already that superapp: users chat, pay for goods, arrange meetings, network, and more, on an extensible platform used by most of the population. In many ways, it is the glue of China's digital economy. And while Tencent has no strategy to make WeChat into a global standard or megabrand outside of China, it is keen to export the supporting technologies. And it wants to help European companies play well in China too - and in the cloud. As General Manager, the urbane and clubbable Fred Sun leads Tencent's cloud business in Europe - which, as the Global Digital Ecosystem Summit explained this week, is now an AI business too. I pulled up a chair with him during the event, as driverless cars thronged the sunny streets outside and robots stalked the convention hall. Sun recently moved from Hong Kong - which is just south of Shenzhen - to the French capital, Paris. So, what was behind that move? France's investment in the nuclear infrastructure to support AI data centers, perhaps? Or its ambition to go head-to-head with the UK on tech? Sun tells me: We have several hubs in Europe. There's Paris, London, Amsterdam, plus offices in Germany, Poland, and even Istanbul. My team are in the UK, France, Germany, and Italy. And a lot of them are here at this event! But there are several reasons why I chose Paris. One is personal to me: I did my Master of Business Administration (MBA) in Fontainebleau, just south of Paris. I speak a bit of French, so it is natural for me to move to a country that I'm familiar with. Those are good reasons. But it is fair to say that Paris has begun rivalling London and Frankfurt as a European technology center, partly due to the French Government's far-sighted decision to invest in a nuclear infrastructure. As well as the capital being an attractive location for expansion across the continent, of course. Sun says: Yes, there are good reasons for me to be in Paris professionally. And a lot of our important clients are based there. We were present at [Paris tech conference] VivaTech 2025 in June, where Dowson [Tong, Tencent's Senior Executive Vice President and Chief Executive Officer (CEO) of the Cloud and Smart Industries Group] did a keynote panel with the Chief Technology Officer (CTO) of Orange Group, Bruno Zerbib. We share a common vision in AI development and agents. Tencent Cloud has partnered with Orange on the latter's digital transformation, via Tencent's Super App as a Service offering, which allows users to deploy unlimited mini-apps and games. So, is that Tencent's definition of conference buzzword 'superapp?' Or does Sun see it as being closer to an 'everything app', like WeChat? Sun says: A superapp is multifaceted, there's no single definition. But obviously, we look at WeChat, which is our regional superapp. And it actually can do everything! It's an ecosystem. And I think that's the key: it's not just about your own products and services, it has to be an ecosystem. The founder of WeChat, Allen Zhang, said something like 'an ecosystem is not a pampered, well-kept garden. Rather, it is a forest.' And in a forest, you allow big trees, small trees, bushes, mushrooms - even poisonous mushrooms - to grow. But it is a forest, and a forest grows on its own. Animals and humans live there too. And all these elements interact with each other. They benefit from each other's presence and complement each other. That's the philosophical concept of an ecosystem. So, going back to the superapp question, it is, first, an ecosystem. It's a place where services, people, and commerce can converge and connect, meaning you're not just focused on your own system, you're also focused on the customer. Sun adds: If the customer is buying or enjoying this service, then why not offer this adjacent service, too, or this segment they might be interested in? In that way, the customer is better engaged and has a better user experience, so they will naturally love your product more, become more loyal, and hopefully, spend more money. So, why not take that idea global? Yet Dowson Tong said at the Summit that this is not Tencent's strategy, which is more about helping people internationally to solve local problems - a form of hyper-localization. By contrast, a US vendor would say, 'Let's create a global megabrand'. Sun responds: Absolutely. We believe our mission is - through digital tools and services, including cloud - to help European businesses thrive and compete. Many leaders say that Europe is playing catch-up [with the US and China]. But we also believe in the strength of European enterprises, with their brand values, good customer bases, smart people, and strong leadership. What we want is for Tencent Cloud services to allow them to be more agile, more innovative, and more cost-effective." Which brings us - discreetly - to politics. My first visit to China was to Shanghai in 2018, when another giant, Huawei, welcomed the world to its own user conference. At that point in time, China was seen as opening up to the West, as a manufacturing partner, and more. Since then, of course, an acrimonious trade war with the US has whipped up hostilities and suspicions on both sides, with Western media routinely linking Chinese suppliers with state surveillance, espionage, and more. (On that point, WeChat's international data is hosted in Singapore, not China, and is not retained by the company.) How much of that political context has made life difficult for Tencent, which claims it just wants to help European businesses succeed? Does Sun encounter any caution and fear in his dealings with Western brands? Sun says: Good question. First, everywhere that Tencent Cloud operates - and we operate globally - we stick to the highest compliance standards. For example, in Europe, we have three data centers. And we comply with the toughest, gold standards. We believe we put users first. We want to make sure they have the most compliant cloud there is. But this is also a responsibility to ourselves, to protect our own interests. Plus, I would say there really shouldn't be any borders in technology adoption, or in innovation. So, while I don't want to comment on the political side, I think smart and innovative European companies have realized that if they see good technology coming out of Tencent, then why not use it? We compete on merit, on our product quality, and our innovative capabilities. And we do something that traditional hyperscalers cannot do, or cannot do at the same pace, or the same price. And that is very important. True: the price point, in every sense, is important. In the West, energy and water costs are soaring, as are the costs of raw materials. Then, earlier this year, DeepSeek challenged the notion that adopting AI demands trillions of dollars in data center capital expenditure (capex). Here was a Chinese company saying, 'We can do this quicker and at a fraction of the price'. Suddenly - almost overnight - AI had new metrics of speed, cost, and efficiency that challenged US dominance. Sun explains: Here's what I think. First, the one thing you notice about DeepSeek, and about our model, or Alibaba's, is that they are all open source. Open source is part of our DNA. And a lot of Tencent Cloud products - not just in AI, but also database, middleware, Big Data platforms - are all based on open source. So, just to ease anyone's concerns about our technology, our software is built on open source, so there's no lock-in. It is very easy to switch between services. That is part of our DNA too. Then there is the realization of our cost benefits. I would say for any business, there is always a trade-off between cost and benefit. Meaning, what is the cost of this technology you're using? How much are you saving? How much additional revenue are you generating? And how much additional customer benefit? So, I don't see this as a debate between East and West. Really, it goes back to fundamental business questions, and I think European companies realize that. They call us, ask for advice on AI, and look for whatever solutions Tencent can offer them. Again, we really don't stress that much about whether it is Chinese, American, or whatever. It's all about the quality and the effectiveness of the products to help these companies stay competitive. So, is Tencent now an AI company first, or still a cloud provider at heart? For a cloud-centric event, much of the Summit's messaging concerned AI - with a side order of 'superapp'. Sun says: AI runs on cloud infrastructure. And for Tencent Cloud, we pride ourselves in offering several layers of AI. For example, at the infrastructure layer, we can provide our customers with very efficient training and inference platforms. Also, thanks to our own development of AI platforms, we can make the best bang for your buck out of the underlying Graphics Processing Unit (GPU) infrastructure. At the platform layer, we offer products such as the Tencent Cloud agent development platform to help companies train agents smartly, quickly, and cost-effectively. Then, at the Software-as-a-Service (SaaS) layer, we have products that are more for China, such as Tencent Meeting, Tencent Docs, and so on. Yes, but despite all that, there was significant caution expressed on the Summit stage about the use of AI in the enterprise - as my previous report from Shenzhen explored. It seems that customers have started being realistic about AI, with all the US-centric noise about superintelligence and Artificial General Intelligence (AGI) beginning to dissipate. Sun says: I'm glad you picked that up. I mostly agree with those comments from the panellists, but I also think they're being incredibly humble about themselves. They are, each of these companies, doing lots of experiments, lots of trials in AI. But those senior leaders realize that they have a business to run. And AI is just a tool, it's something that helps them run that business. You do not work for the AI; you've got to make it work for you. So, we're not looking for some crazy transformation where your life will be turned around in months. Take a longer perspective. The changes, the transformations, will come, but they must happen alongside real business impacts with real milestones. At Tencent Cloud, our value is to sit with our customers. We are their digitization partner. We do not tell them what to do. We sit together. That concludes this exclusive look behind the red curtain with Tencent. But in the months ahead, diginomica will keep you up to date with strategic developments on the ground in China. Just as we did with KubeCon China this year, and in 2024.

Tencent Summit - general Large Language Models and chatbots "no longer meet business needs" for enterprise Artificial Intelligence

The pizazz feels welcoming and familiar: the expectant crowd filling a hangar-sized convention hall; a stage the width of a football field; the pounding music and widescreen visuals; the discreet plumes of stage smoke, allowing pencil-beams of light to strafe the air; the headset mics and welcoming MC; and - of course - the C-level 'fireside chat' patois, in which every sentence begins with "So..." and ends with, "right?" ("So, we're building out our capability, right?") We have all been to these huge tech-industry events. But this isn't some rock star US vendor welcoming customers to the Moscone in San Francisco or the Javits in New York. It is Chinese multinational Tencent kicking off its annual summit in Shenzhen, the high-tech megacity just north of Hong Kong - the exact point on Earth where the old world ends, and a new one begins. Tencent has been an entertainment and internet company throughout this fast-maturing century, but you would think that it is now an AI specialist, given that even the cloud-focused sessions at its 2025 Global Digital Ecosystem Summit (September 16-17) are dominated by talk of AI, AI, AI (with a side order of 'superapp'). The event explores how coding assistants and AI agents can automate tasks across industrial use cases, while optimized cloud-based network storage can improve efficiency for AI model training and inference. Throughout, the focus is on international markets - or rather, internationalized ones (aka, go local to be global). But the message is clear: Tencent is competing on the world stage. And, beyond it, China is too. Yet while China is sometimes seen as being six months behind the US in enterprise applications of the technology, there is a clear suggestion that, on one topic at least, China is neck and neck with America: recognizing that the AI hype cycle is ending, and a new era of realism and pragmatism is kicking in. If you listen carefully, the event's showbiz pizazz and upbeat messaging about AI in the cloud - on the conference stage, in the panel-session huddles, and in the side-room press briefings - are punctuated with acknowledgements that hype is counter-productive when you seek evidenced business results. Common-sense and reality are creeping back in. And not a moment before time. The first evidence of this comes from Eric Li, Director of AI Commercialization for Tencent Cloud, in a pre-conference media briefing. Lurking in his presentation slides is a bold and simple statement: Traditional chatbots, general LLMs, and even optimized systems no longer meet business needs. There it is, in blue and white, for the world's media to see. Of course, this has been the subtext of research studies in the West this autumn, most famously MIT's finding that 95 percent of projects return no measurable business benefits. Yet those same big-name chatbots and LLMs have driven popular uptake and investment dollars, which is why nerves are jangling in the US and Europe about an AI winter. I ask Li about this, in the context of his own presentation, which focuses on helping businesses achieve what they need to do in the best, most localized way possible. Li tells me: I think every company in this era has different perspectives on the development of large-scale models. But at Tencent, we always prioritize commercial applications and deployments. Our product team focuses on enterprise-level platform applications. So, why do we say that traditional chatbots are unsuitable for enterprise applications? It is based on the customer's needs. Some companies just can't afford to make mistakes! When a model interprets something, there's the potential for bias. So, we need to ensure it doesn't have this bias. Accordingly we are working on an intent model, which is designed to always understand the user's intent. The internal intent model has hundreds of detailed nodes. For each node, the agent analyzes the intent. Based on each node, the agent generates a different workflow. Therefore, the tolerance for error in intent understanding is extremely low. Our intent model prioritizes the most correct answers. And when it comes to the big picture, China can take some credit for the outbreak of bubble-pricking realism in enterprise AI. DeepSeek's arrival at the beginning of this year makes a nonsense of some US vendors' demand for trillions of dollars in data center capex to run a subscription business that is an order of magnitude smaller. And that is before we even get onto the energy, water, and carbon costs. DeepSeek reminds the world that China can build things faster, cheaper, and more efficiently than the West - after all, that is why its economy has exploded in recent decades. If you doubt it, remember this: Shenzhen, once a modest fishing town, is now the sixth largest city in the country - a megacity among megacities, with a population nearly 600 times larger than it was in the final years of the 20th Century. And guess what? Everything in that city is clean, works, and is designed around its people. Even the Summit's estimated 10,000 delegates stream into the event without queuing, despite passing through airport-style security checks and scanners - an achievement in itself. While super-powerful US AI vendors' message to the world has been 'You work for us now, we have scraped all your data, we own your IP by default', Chinese vendors typically say, 'We work for you and we are open-sourcing all this so you can build your own solutions.' It's a good response. An oversimplification, of course. Yet evidence of a sea-change in the AI market is all over Chinese breakfast TV news this week. Another vendor, Alibaba, launches the latest version of its Qwen Large Language Model, plus the Tongyi Deep Research Agent. Both offer impressive results and speed - "ten times faster, 90 percent cheaper!" say news anchors - yet the markets barely move until that company also announces a chip deal with China Unicorn. America, take note: bigger, faster, cheaper AI models are yesterday's news in this country. China is now coming for your AI processors. So, would you bet against it? But back to Tencent and the Summit stage in Shenzhen. There are further outbreaks of realism about AI, even among the supportive, upbeat guests, partners, and customers, who speak - with apparent sincerity - of Tencent's "humility" in one-to-one business meetings, despite the chutzpah of the event itself. Catherine Sutjahyo, Group Director of Indonesian digital ecosystem provider GoTo, notes that "Indonesia hasn't found a groundbreaking application" of AI yet, but has a "willingness to try". Sutjahyo adds that "everybody should look at this AI and say, 'How can we use it?'" - surely evidence of the lasting influence of AI hype rather than businesses starting with an urgent business need and proceeding from there. Lolaire McKinnon, Head of Cloud for racing organization the Hong Kong Jockey Club, notes that generative AI is "cool, but not lifechanging". McKinnon also acknowledges the rise of shadow AI among users, and the challenge of employees sending out material that is obviously AI generated. All familiar challenges in the West, but good to hear such issues called out on a conference stage. Mikael Suvi, Chief Technology Officer (CTO) of digital games provider Miniclip, observes that AI "is not superhuman, it's just maths", and advises users to think about it that way. Quite right too: talk of superhuman machine intelligence, and genius, PhD-level AIs has - to date, at least - been obvious bunkum. Just marketing noise from the likes of Anthropic and OpenAI. Even Poshu Yeung, Senior Vice President of Tencent Cloud and Head of Tencent Cloud International, notes that AI is a buzzword, but what everyone is really talking about, Yeung says, is the idea of the superapp. In mainland China, that is Tencent's own WeChat and the Weixin ecosystem, used by most of the 1.5 billion population. Tencent's strategy is to export the enabling technologies for these innovations, rather than the super brand itself. Meanwhile, in the panel on the financial sector's response to cloud-based AI, Vince Iswara, Chief Executive Officer (CEO) and co-founder of Indonesian digital wallet DANA, notes that AI is all about "diamonds in, diamonds out". In other words, you get out whatever quality you have put in, and not what some vendors have simply scraped off the Web. Yet as one of my earlier reports this month noted, even LLMs that have been trained on trusted, industry-specific data sets are prone to hallucinate. So, if you trust your training data, you should always doublecheck your AI's output against it.

China in its hand? Tencent's Global Digital Ecosystem Summit reaches out to 'internationalize'

For centuries, Shenzhen, in Guangdong Province, China, was a fishing village and port on the Pearl River Estuary. It became a city as recently as 1980, when its population was just 30,000 people: less than that of a small commuter town. But today, it is the third largest city in China: a vast, sprawling, high-tech metropolis linking Hong Kong to the mainland. Incredibly, it is now home to over 17 million people - many of whom are young, ambitious, and attracted to work in the industry that drives it: new technology. As its hundreds of new-build skyscrapers attest, much of the city has sprung up this century alongside China's burgeoning tech sector. Shenzhen is home to, among countless others, electronics and telecoms giant, Huawei - target of the first skirmishes in the US trade war; robotics innovator UBTECH, whose devices stretch from educational toys to industrial machines, via the booming market in humanoids; drone colossus DJI, whose products still set the pace in that industry worldwide; and cloud, entertainment, and internet services multinational Tencent, which is my host in China this week. As with so much in China, the scale of the change is breathtaking, as megacities spring up almost overnight, together with the infrastructures - both real and virtual - to serve them. (In the UK, the same timescale has produced a single overbudget, half-built railway, a decades-long argument over an airport runway, and a tube line.) Tencent's 2025 Global Digital Ecosystem Summit has taken over the massive Shenzhen World Exhibition & Convention Center this week, with the conference hall and trade stands hosting an estimated 10,000 delegates over two days. Indeed, the trade show area is buzzier than any I can remember, with humanoid robots, air taxis, autonomous vehicles, connected cars, drones, and countless gaming, entertainment, automation, 3D printing, and other innovations on show. The software ecosystem that powers all that hardware is provided by Tencent. Meanwhile, at the firm's twin-towered headquarters in central Shenzhen - a huge building it has already outgrown, with a new high-tech campus opening in the next few months - a walk-through showcase reveals other innovations, including sustainable, modular data centers built inside mountains and assembled there, LEGO-style, by specially designed robots. The Summit experience feels like the business it reflects - lively, people focused, and bold, yet also approachable and well-integrated into the lives of the ambitious customers it serves. But while Tencent has been a cloud, gaming, and entertainment provider since inception - with success driven by 'do everything' app WeChat and its Weixin ecosystem - there are just two buzzwords at this year's event: 'superapps' and (of course) Artificial Intelligence (AI). Plus, a bigger enterprise Business-to-Business (B2B) focus than you might imagine would be Tencent's secret sauce. On September 16, Tencent announced the global roll-out of what it calls "new scenario-based AI capabilities", which are designed to enable customers across different industries to operate more efficiently. According to the company, it comprises a suite of intelligent agents, backed with what Tencent calls "Software-as-a-Service (SaaS) + AI" solutions and Large Language Model (LLM) upgrades. As Dowson Tong, Senior Executive Vice President and Chief Executive Officer of the Cloud and Smart Industries Group explains in a private briefing, while Tencent operates globally, it is not about forcing global solutions onto customers. Instead, it prefers to enable hyper-localization for its cloud and AI business, enabling its clients to do whatever works for their own customers locally. In short, it is all about internationalization - China's version of 'if you want to go global, act local'. In this limited sense, it is the inverse policy to some American Big Techs, which seek to export a monolithic way of working (and have been successful in doing so. On the morning of the conference, Google parent Alphabet became the fourth US provider to pass the three trillion dollar market cap barrier). Tong says: I would say AI means a lot of things to us. But our focus is to leverage the unique capabilities that we have on specific use cases. For example, we are deploying Palm AI for user verification as a very efficient way to authenticate users. In fact, we just launched it in Brazil, in metro stations. Palm AI is a system whereby a user's palm identifies them at ticket gates or in shops to pay for goods, doing away with the need for debit cards, top-up payment cards, QR codes, or phones at points of sale. A biometric scanner recognizes not just a person's palm print as they hold their hand in the air above it, but also the underlying veins. Some shops and businesses in Shenzhen use the system. Tong continues: Another one would be eKYC [electronic know your customer] capabilities that we have been serving a lot of financial institutions with. Banks in Indonesia are working with us on a bunch of technologies that leverage AI in their business operations. Then he adds: I would also highlight that with open-source models getting more and more widely used and powerful - and, in many cases, more efficient for doing inference - we are providing a set of tools to build agents for many of our enterprise customers. For Tencent, it is all about open-source AI, so others can build solutions around it. He continues: And we are seeing a lot of interest from banks, from hospitals, and even from retailers who want to use AI-powered agents to enhance their user experience, to increase conversion - like how we use AI to grow our advertising business. So, many of the experiences for which we have leveraged AI in our own business, and in different industries for our mainland customers, will be applicable to other regions. And we're seeing a lot of interest in those areas. At the main Summit, Tong sets out Tencent's vision. Usable and practical AI applications drive industrial efficiency, while internationalization charts new growth possibilities. Our newly launched and upgraded solutions will support enterprises in their intelligence and internationalization journey as they build scalable and sustainable growth. Tencent Cloud also launched Agent Development Platform 3.0 (ADP), which enables clients to generate and integrate intelligent, autonomous AI agents into their workflows, in horizontal applications such as customer service, Marketing, inventory management, scientific research, and more. The upgraded SaaS+AI toolkit enhances office collaboration for its clients, including AI Minutes in Tencent Meetings, which the company claims has seen a year-on-year growth rate of 150 percent over the past year. However, some of these solutions - such as Tencent Meetings - are solely focused on the domestic market. So, what about solutions such as Palm AI? On the face of it, this could catch on worldwide. Is there anything preventing that outcome - for example, data regulations, cultural differences in some territories, or fears about China collecting data on other nations and surveilling their citizens? Tong explains: Any service that we offer would definitely be compliant with local regulations. And, I think the fact that we offer software to our partners to manage that service themselves would be another measure to help our partners feel more comfortable in handling the data in their own environment, in their own data centers. All of the software that we release outside of China gets all the security certification and whatever approvals are needed to even provide software for other people to operate. So, we will always make sure that is the case when we release products like that. And we are seeing increasing interest. Also, I think adoption of these new technologies will take time. It's just a very typical technology adoption curve that we're seeing throughout the world. But no significant player in the current AI space would be complete with a Large Language Model, which in Tencent's case is Hunyuan. Upgrades announced at the event include Hunyuan 3D 3.0, Hunyuan 3D AI, and Hunyuan 3D Studio, for creators and developers in the media and gaming industries, and beyond. According to Tencent, Hunyuan 3D series models have been downloaded over 2.6 million times on Hugging Face, making them the most popular open-source 3D models globally. More exclusive coverage from Tencent in Shenzhen throughout this week.