Chinese tech giants from Kuaishou to Tencent reap early gains from big AI bets

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Chinese technology powerhouses are beginning to reap early returns from their heavy investments in artificial intelligence, with quarterly results showing the impact across businesses from short video platforms like Kuaishou Technology to social media giants like Tencent Holdings.

Kuaishou, China's second-largest short video app and rival to TikTok's Chinese sibling Douyin, was the latest to highlight gains from AI adoption. The company, in an earnings statement on Wednesday, attributed its third-quarter revenue growth to the use of AI technology to upgrade marketing solutions and its Kling video tool.

Online marketing services sales grew 14 per cent to 20.1 billion yuan (US$2.81 billion), while sales for other services jumped 41.3 per cent to 5.9 billion yuan in the three months ended September.

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Kuaishou co-founder and CEO Cheng Yixiao said in the earnings statement that "AI capabilities deeply embedded across business scenarios" helped it deliver a robust quarter.

Tencent says its various businesses benefited from strategic investments in AI. Photo: Shutterstock alt=Tencent says its various businesses benefited from strategic investments in AI. Photo: Shutterstock>

Tencent, the Chinese social media and video gaming powerhouse, posted a 19 per cent jump in third-quarter profit on AI-related gains, it said last week. Pony Ma Huateng, founder, chairman and CEO of Tencent, said areas from ad targeting to game engagement to producing code, games and videos benefited from strategic investments in AI.

AI also emerged as the rare bright spot for Baidu, which posted an underwhelming quarter on Tuesday. The search engine company saw a 50 per cent increase in AI-related revenue across its cloud, application and marketing businesses in the third quarter, contrasting with a 7 per cent decline in overall revenue during the period.

Analysts at BOC International said the wider use of AI tools across Chinese firms had shown positive effects on business performance. "AI applications in specific business scenarios have been validated with emerging monetisation potential," the securities firm said in a note on Wednesday.

China's Big Tech companies have been spending heavily on AI to empower businesses and enhance efficiency. But there are also concerns about excessive spending and the risk of wasted investment.

Brock Silvers, chief investment officer at private equity investment firm Kaiyuan Capital, said the scale of capital expenditure "should be extremely worrisome to investors" at a time when AI's potentials have not been fully realised.

Silvers added that "should AI disappoint, or merely display a longer timeline, market reaction could suddenly turn savage".

China's tech executives, meanwhile, remain confident in AI. Kuaishou's Cheng said in a post-earnings conference call that "in the long run [we] believe a comprehensive AI application ecosystem will help the company better adjust to the market with high growth potential".

Baidu chief financial officer He Haijian said the company's AI-related businesses had "laid a solid foundation for sustainable long-term growth".

Charlie Chai, deputy head of research consultancy 86Research, said Chinese firms' disciplined return-on-investment culture would allow them to keep creating value during the AI boom while cushioning against any downturn if the bubble bursts.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

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