Tencent announces $70bn tech investment

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Tencent Holdings has announced its intention to invest $70bn (£57bn, €64bn) in new technology infrastructure over the next five years, the latest indication of the sheer wealth and growing influence of the Chinese tech giant.

The developer of WeChat, the popular Chinese messaging app, Tencent is best-known beyond the world’s second-largest economy as the parent company to a number of popular games developers.

It completely owns Riot Games the developer of the popular League of Legends series, has a 40 per cent stake in Epic Games the creator of Fortnite and recently found further success with Call of Duty: Mobile.

 

Tencent Holdings Limited

With this latest announcement, the company has signalled its intention to become a major competitor in the world of cloud computing, cybersecurity and artificial intelligence.

Dowson Tong, Tencent’s senior executive vice president, also revealed in an interview with state media the company’s determination to invest in quantum computing, blockchain, IoT operating centres, large data centres, supercomputer centres and 5G networks.

The size and breadth of Tencent’s declared ambitions will surprise and concern many of its rivals, both within and without China. Indeed, the $14bn it has committed to spend on average every year, is more than double the $7.6bn yearly sum its Chinese competitor Alibaba recently allocated to new infrastructure investment.

With business activity returning to some normality in China and legions of Western gamers still under some forms of lockdown, Tencent has been able to weather the Covid-19 storm.

In the midst of the crisis the company rolled out a number of health tracking services for the Chinese government. In the eyes of Tong this “‘new infrastructure’ strategy will help further cement virus containment success”.

Following the announcement, Tencent shares closed up 2.11 per cent.

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