BEIJING (Reuters) -Tencent Holdings’ stockpiles of AI chips should protect it from U.S. restrictions, its president said on Wednesday, after it reported first-quarter results that beat expectations.
Tencent, the world’s largest video game company and WeChat operator, reported revenue of 180 billion yuan ($24.97 billion) for the quarter ended March, up 13% and beating LSEG analysts’ estimates of 174.6 billion yuan.
The growth was driven by strong performance in gaming and advertising, with both segments benefiting from AI enhancements.
“The good thing is that we have a strong stockpile of chips that we acquired previously and that would be very useful for executing our AI strategy,” Tencent President Martin Lau said in a post-earnings call.
He did not directly address the impact on Tencent’s spending plans of U.S. rules that have banned sales of Nvidia’s advanced H20 chip to Chinese companies.
However, the company noted alternative chips are available in China and that its software innovations should optimise chip efficiency.
Tencent in March said it would allocate a low double-digit percentage of 2025 revenue to capital expenditure, primarily for AI development.
For the quarter, domestic gaming revenue rose 24% to 42.9 billion yuan, it said on Wednesday, while international gaming revenue climbed 23% to 16.6 billion yuan.
Marketing services revenue increased 22% year-on-year to 17.7 billion yuan, driven by AI-powered advertising.
The company’s FinTech and Business Services segment, which includes consumer loans, wealth management and cloud services, posted revenue of 27.6 billion yuan, a 16% increase.
Net profit for the quarter was 47.8 billion yuan, compared with analyst expectations of 52.2 billion yuan, LSEG data showed.
Tencent has developed its own proprietary large language model Hunyuan, and in March made public a version called T1.
Of its peers, it has been the most open to adopting third-party technology. It became the first major Chinese tech company to integrate technology from DeepSeek, which gained prominence this year with its release of AI models that rival Western counterparts at lower development costs.
($1 = 7.2086 Chinese yuan renminbi)
(Reporting by Liam Mo and Brenda Goh; Editing by Christian Schmollinger, Emelia Sithole-Matarise and Barbara Lewis)
