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 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.