The firm’s second-quarter revenue surpassed market projections at US$30.4 billion, but the surge in AI spending led to a large negative free cash flow Tencent Holdings nearly tripled its capital spending in the second quarter to supercharge its AI push, as accelerating investments in computing power and models helped drive better-than-expected revenue. Revenue for the quarter ending in June reached 204.8 billion yuan (US$30.4 billion), up 11 per cent year on year from 184.5 billion yuan, the Chinese tech giant reported on Wednesday. The figure beat average analyst estimates of 202.8 billion yuan compiled by Bloomberg. Adjusted net income reached 68.4 billion yuan, in line with consensus estimates of 68.2 billion yuan and up from 63.1 billion yuan in the same period last year. “As we enter into the third quarter of the year, we are making substantial progress towards building a new, AI-empowered Tencent in terms of intelligence, applications and infrastructure,” said Pony Ma Huateng, Tencent’s co-founder, chairman and CEO, in a statement. Before the earnings release, Tencent shares closed down 1.95 per cent at HK$461.6 (US$58.82) in Hong Kong trading on Wednesday.
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