Tencent Holdings Ltd. said it plans to unveil a proprietary artificial-intelligence model later this year that it believes will be among the best in China, an early sign the internet powerhouse expects to compete in the field against early leaders such as Baidu Inc. and SenseTime Group Inc.

Tencent executives, addressing the AI phenomenon after reporting financial results, said its progress in developing a large language model to power generative AI and other applications was going very well. The games giant has been perceived as trailing some of its domestic peers, in part because it’s said little about its efforts. It has been testing the model, called Hunyuan, on services like cloud computing and search.

“It’s among the top leading foundation models produced in China,” said Martin Lau, the company’s president, on the second-quarter earnings call Wednesday. “We are very relentlessly working on the upgrade and iteration to prepare it for launch at some point of time in the latter part of this year.”

Tencent said its experimentation with AI goes far beyond the kind of bots made famous by OpenAI’s ChatGPT. The Chinese company is testing AI internally for gaming, cloud computing and financial technology. It also anticipates being able to use the technology to boost its advertising and marketing efforts.

“AI, the more we look at it, the more excited we are about it as a growth multiplier for our business,” Lau said. “We look at the opportunity and technology much more broadly than just a chatbot and Q&A type of experience.”

On the cloud side, Tencent is preparing a marketplace for business clients, where they can pick and choose generative AI-powered services, which will translate into high-margin profit to the company, Lau says.

For more on Tencent second-quarter earnings, click here for our TOPLive blog.

Author: Zheping Huang, Sarah Zheng and Vlad Savov