Nomura published a report stating that Tencent's surge in AI spending should be viewed as a strategic advantage, maintaining a “buy” rating, and the target price was lowered from HK$727 to HK$695. Tencent's second-quarter results are in line with expectations. According to the bank's calculations, AI related investments may exceed 100 billion yuan during the period, including 53 billion yuan in capital expenditure and an additional 51 billion yuan in advance payments to lock in computing power resources. The bank believes that this impressive investment in artificial intelligence shows Tencent's commitment to building indispensable infrastructure, enabling the company to effectively compete with peers such as ByteDance and Ali. With supply shortages in the Chinese industry, Tencent's surge in AI spending this year shows its ability to successfully procure the GPU resources it needs. As management pointed out during the August 12 performance conference call, recently locked computing power resources can be easily leased at a premium through Tencent Cloud, providing a built-in safety net.

Nomura published a report stating that Tencent's surge in AI spending should be viewed as a strategic advantage, maintaining a “buy” rating, and the target price was lowered from HK$727 to HK$695. Tencent's second-quarter results are in line with expectations. According to the bank's calculations, AI related investments may exceed 100 billion yuan during the period, including 53 billion yuan in capital expenditure and an additional 51 billion yuan in advance payments to lock in computing power resources. The bank believes that this impressive investment in artificial intelligence shows Tencent's commitment to building indispensable infrastructure, enabling the company to effectively compete with peers such as ByteDance and Ali. With supply shortages in the Chinese industry, Tencent's surge in AI spending this year shows its ability to successfully procure the GPU resources it needs. As management pointed out during the August 12 performance conference call, recently locked computing power resources can be easily leased at a premium through Tencent Cloud, providing a built-in safety net.