Tencent bets its China WeChat and gaming expertise will help it win cloud business in Europe

CNBC

6 hours ago

Tencent has spent years evolving into a gaming and social media giant in China and in the process, has built up its cloud computing capabilities.
The technology firm is now looking to bring that expertise to Europe as it ramps up expansion of its cloud business overseas, Dowson Tong, CEO of Tencent's cloud group told CNBC.
"We have strengths and competence in very specific technology areas, as well as industry verticals," Tong said in an interview last week. "These are are very unique technology capabilities that have been developed over many years [and] started from our products in China."
"So we intend to bring a lot of this technology expertise to Europe. We're talking to a lot of interested potential customers."
Tencent's European push will pitch it against U.S. hyperscalers Amazon, Microsoft and Alphabet-owned Google, which collectively make up 70% share of Europe's cloud market.
But the Chinese firm is hoping to focus on specific areas where it has built up capabilities to differentiate from rivals.
Tong said these include cloud technologies for areas like optimizing video streaming, ensuring a smooth gaming experience, and developing and hosting so-called "super apps" like WeChat — China's biggest messaging service. WeChat is often seen as the pioneer of super apps, a term that refers to an application with multiple functions, such as messaging and payments.
Tong gave an example of Tencent's cloud computing work with French telecommunications firm Orange in supporting the company's Max it app in Africa. In the area of gaming, Tencent's cloud technology can improve "latency," which is a technical term for the lag between a player's actions and what happens on screen, Tong said.
The Chinese company is also betting on European companies opting for multiple cloud providers for services, instead of relying on one or two of the big players.
"I would say that's actually a ... deliberate strategy of ours to make the customers feel more comfortable using our technology, especially in a multi-cloud environment," he said, adding that customers want to be able to interoperate.
Cloud computing companies have put an increased focus on selling artificial intelligence tools as a way to boost revenue and differentiate their offerings from rivals.
Tencent has built up its own artificial intelligence foundational model in China called Hunyuan. But it also uses some models created by Chinese firm DeepSeek in its products.
Tong said Tencent would take a similar approach in Europe when it comes to AI, potentially offering products built on European models.
"Our focus would be providing tools that would work with different foundation models and ultimately, it's the customer's decision which model works best for them," Tong told CNBC.
"So I think at the end of the day, we would always go to our customers, find the problems they wanted addressed, provide them tools so that they can accomplish what they need, and realise the cost efficiency that we can offer."