(June 2): Tencent Holdings Ltd shares advanced the most in more than three years after a report it’s testing a prototype artificial intelligence agent fuelled optimism about the company’s AI efforts.
The Chinese internet giant plans to begin a compliance process for a public launch of the agent as soon as this month, the Financial Times reported, citing unidentified people with knowledge of the plan. After that, Tencent plans to test the agent on a small group of outside users before initiating a phased roll-out, the newspaper said.
Shares of Tencent climbed as much as 10% in Hong Kong for their biggest intraday gain since late 2022. The stock gave a boost to the Hang Seng Tech Index, which rose more than 4%.
A successful introduction of an AI agent for the popular WeChat service would mark a step forward for Tencent’s bid to catch up to rivals in the rapidly emerging technology. While Tencent has vowed to at least double investments in the field to more than 36 billion yuan (US$5.3 billion or $6.8 billion) this year, it trails peers like ByteDance Ltd and Alibaba Group Holding Ltd in both user adoption and advances in developing state-of-the-art large language models.
“Tencent has been a huge underperformer this year because market perceives it as an AI laggard,” said Vey-Sern Ling, the managing director of Union Bancaire Privee. “The AI agent, if successful, could change such a perception. Even though there’s very little detail right now, we know Tencent has a huge ecosystem to make it work.”
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A slew of positive drivers including Meituan’s earnings and upbeat delivery figures by electric vehicle makers also supported the Hang Seng Tech Index. With its reliance on Chinese internet giants, the gauge has trailed the blistering surge in tech hardware-heavy benchmarks such as South Korea’s Kospi and Taiwan’s Taiex this year.
Despite the Tuesday rebound, Tencent remains down about 20% for the year, underperforming the Hang Seng Tech gauge by a wide margin.
A public launch date for the AI agent hasn’t been set because the amount of time required for the compliance process is uncertain, the Financial Times reported. Users will be able to access the chat box for the AI agent by swiping right on the main WeChat screen, the paper said.
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A Tencent spokesperson declined to comment.
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