Tencent, the Chinese mobile games and social media company, is gearing up to increase its investments in online payments, cloud services and artificial intelligence.
According to a news report in Reuters, Tencent is late to the party when it comes to those three areas and as a result wants to boost spending levels. “We will be persistent but patient with our AI investment, because we believe it is a long-term initiative and we do not necessarily require our research to generate revenue directly in the short term,” Tencent President Martin Lau said, according to Reuters.
The comments came as the Chinese company posted its best-ever quarterly results, thanks to smartphone games, online payments and advertising. Tencent’s president noted that all of its existing units would benefit from AI, but particularly its advertising business, information services and FinTech.
For the second quarter, Tencent’s profits surpassed Wall Street expectations, posting a gain of 18.23 billion yuan ($2.72 billion), which is 70 percent higher than a year ago. It marks the biggest gain in seven years for the mobile games and social media company. Revenue increased 59 percent to 56.6 billion yuan. For its WeChat messaging and payment app, Tencent said monthly active users increased to a new record of 963 million, while its online payment business also saw increases.
Still, with competition on the rise in the digital payments market, the investments are necessary. “We think there is still a lot of growth potential from Tencent’s cloud and payment business,” BOCOM International Analyst Connie Gu said in the Reuters report.
China’s Tencent isn’t only investing in artificial intelligence, payments and cloud services. Earlier this month, it showcased how it is also investing in other areas. Essential Products, the smartphone company that was started by Andy Rubin — the creator of the Android mobile operating system — raised $300 million in venture funding from a cadre of investors, including Tencent. According to a news report in The Wall Street Journal, the company announced the list of investors betting it can take on Apple and Samsung Electronics in the smartphone market, reported the paper.