(Bloomberg) -- Tencent Holdings Ltd. revealed a major upgrade to its foundational model, marking the first high-stakes test for China’s most valuable company to assert its place in a frenetic AI race since it recruited a top researcher from OpenAI.
The social media leader on Thursday unveiled a preview of the Hy3 model, which it called its most powerful yet. The Hy3 — a reference to Tencent’s main Hunyuan platform — represents a big advance in areas from complex reasoning to coding. The model, which supports OpenClaw, is now available via a wide suite of Tencent product including its chatbot, coding tool and QQ.
Tencent is playing catch-up with peers like ByteDance Ltd. and Alibaba Group Holding Ltd., as well as up-and-comers like DeepSeek, in the release of cost-efficient AI models to a market of more than a billion internet users. That effort is now led by Chief AI Scientist Yao Shunyu, an OpenAI alumnus who is among the most prominent examples of US-trained researchers returning home to spearhead AI development.
The Shenzhen-based gaming and social media giant has restructured its research team to improve the quality of training data, executives said last month, vowing to double investments in AI initiatives to more than $5 billion this year.
It’s betting on a shift to so-called agentic AI — software capable of performing complex tasks with minimal human input — that could reshape leadership of the world’s biggest internet arena.
The WeChat operator last month rolled out a slew of products capitalizing on the viral OpenClaw framework and is developing an AI agent inside its flagship super-app to help users automate tasks from hailing a ride to booking hotels.
Like Alibaba, Tencent has backed a crop of AI upstarts — including Moonshot AI and StepFun — hoping the ties will boost compute usage for its burgeoning cloud division. It’s now in discussions to join a maiden round of financing for Chinese AI pioneer DeepSeek, Bloomberg News reported.
China’s AI race is entering a higher-stakes phase as a worsening compute crunch compels developers big and small to abandon discounts and hike fees. Alibaba and ByteDance now lead in photorealistic AI video generation, though peers like Kuaishou Technology also vie for dominance.
And just this week, Moonshot rolled out its latest Kimi K2.6 model, featuring improved agentic and coding capabilities. DeepSeek’s next-generation V4 model is also expected to debut in coming weeks.
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