By Sherry Qin

Tencent Holdings maintained double-digit profit and revenue growth, ending 2025 on a high note as the Chinese tech giant ramped up its artificial-intelligence efforts to stay ahead amid relentless competition in China.

The WeChat operator, China's largest company by market capitalization, said Wednesday that fourth-quarter net profit rose 13.5% from a year earlier to 58.26 billion yuan, equivalent to $8.46 billion. Revenue climbed 13% to 194.37 billion yuan. Both figures beat market expectations, marking the fifth straight quarter of double-digit growth.

The strong results capped a year of solid growth for China's most valuable company and come as it is upping its AI game. Previously focused on leveraging AI to boost productivity and reduce costs across various businesses, Tencent has accelerated its efforts in recent months, establishing a new AI division, aggressively marketing its AI app to drive adoption and launching new AI products to signal its ambition.

Tencent last year hired Yao Shunyu, a former researcher at ChatGPT maker OpenAI, to lead the company's AI infrastructure efforts, including the development of large language models. Then it joined domestic peers like Alibaba and ByteDance in offering steep incentives to attract users to their AI tools during the Lunar New Year break.

This month, after OpenClaw, the open-source AI assistant, became a hit in China's tech community, Tencent swiftly released a series of OpenClaw-like AI agent tools to capitalize on the hype and integrate them in its ecosystem.

Chairman Pony Ma highlighted OpenClaw's flexibility and efficiency on the earnings call, saying that the agentic AI assistant allows Tencent to leverage its ecosystem strength to compete on multiple fronts.

OpenClaw has also shown Tencent that every mini-program within WeChat could be AI-enabled, he said.

The market has cheered the new product launches, sending Tencent's stock up 7.3% in a single session earlier in March, the biggest jump in a year.

Still, Tencent shares remain about 8% lower so far this year after falling nearly 10% in the three months ended December. Despite the company's recent streak of robust earnings, investors are concerned it is falling behind in China's increasingly competitive AI market.

Investors "worry that Tencent could be challenged by the rising AI chatbots, agentic applications and AI phones on the consumer end," Citi analysts said in a research note. "Its enterprise cloud also seems to be growing slower than peers like AliCloud and ByteDance's Volcano."

As agentic AI takes center stage in the AI revolution, Chinese companies are racing to get ahead in this new battleground. The latest advancement in AI technology enables autonomous decision-making, allowing tasks to be initiated and completed without human intervention.

Analysts at HSBC said competition remains fluid at this early stage, and any breakthroughs in models or products can quickly reshuffle the user landscape.

Citi analysts reckon Tencent's dominant communication platforms in China--QQ and Weixin--provide a unique ecosystem advantage that enables seamless user management of AI agents.

Tencent will at least double its AI investment in 2026 after spending 18 billion yuan last year, President Martin Lau said.

Tencent's capital expenditure rose just 3.2% to 79.20 billion yuan in 2025, making up 10.5% of revenue. Management had said that 2025 capex could be lower than the previous low-teen percentage of revenue guided due to AI chip supply constraints.

The company could reach its capex goal if it secures enough chips this year, Lau said, adding that Tencent is confident it can balance AI investment and shareholder returns.

Tencent's bread-and-butter gaming business maintained solid growth in the three months ended December, with revenue from domestic games rising 15% and international games revenue jumping 32% as both evergreen games and newly launched titles showed strong momentum.

Last week, Apple lowered the commission it charges on digital sales in China to 25% from 30%, a move that bodes well for game developers such as Tencent.

WeChat and Weixin had a combined 1.418 billion monthly active users at the end of December, up 2% from a year earlier.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

March 18, 2026 07:52 ET (11:52 GMT)

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