Tencent plans to invest 500 billion yuan, or $70 billion, in cloud computing, artificial intelligence (AI) and cybersecurity over the next five years, Reuters reported.
The Chinese tech giant wants to capitalize on an initiative from Beijing, which announced it wanted to bolster the country's technology infrastructure in the next few years.
Tencent Executive Vice President Dowson Tong said in an interview with state media that the company also wants to put money into experimenting with blockchain, servers, big data centers, supercomputer centers, Internet of Things (IoT) operating systems, 5G networks and quantum computing.
Tencent said the coronavirus pandemic had hit cloud-based companies hard, but the eventual outcome would likely be in the favor of digitization. Tong said the long term would likely see more public sector adoption of cloud services and other new technology, whether to help fight the virus or just to adjust to new realities of life it has caused.
Tencent has been doing well this year, PYMNTS previously reported, with better earnings in the first quarter of this year than it had in 2019. The company had a total net revenue of $15.2 billion, 26 percent higher year over year.
The company, known for its WeChat app and a number of games, was able to profit off of the numbers of people staying home for much of the spring due to the pandemic. The proof is in the statistics — online gaming revenue is up 31 percent this year, social network revenue up 23 percent and online advertising up 32 percent, with social media advertising up 47 percent.
China Renaissance analyst Alex Liu said the pandemic “expedited the digitalization of people’s way of life,” according to Reuters.
Tencent isn’t currently the top contender in China in the cloud market, with only 18 percent in the fourth quarter, as opposed to Alibaba’s 46 percent majority, according to research from Canalys, the news service reported.
As the news of Tencent’s new ambitions surfaced, the company’s shares were up 2 percent, according to the report.