This week’s podcast is about my visit to Tencent AI Cloud in Beijing.

You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.

Here is the link to the TechMoat Consulting.

Here is the link to our Tech Tours.

Here are my 3 take-aways:

1. Take-Away 1: Tencent Cloud is Doing “Fast-Follower with Advantages” in AI.
2. WeChat and Tencent Cloud Are Going International Leading with Tech Services.
3. I Expect Tencent Cloud to Be One of the World’s Top 5 AI Cloud Companies.

——

Related articles:

• How Amap Beat Baidu Maps. My Summary of the Alibaba Playbook. (Tech Strategy – Podcast 252)
• Scale Advantages Are Key. But Competitive Advantages Are More Specific and Measurable. (Tech Strategy)
• The Characteristics of Unattractive Industries with Cutthroat Competition (1 of 3) (Tech Strategy)

From the Concept Library, concepts for this article are:

• n/a

From the Company Library, companies for this article are:

• Tencent Cloud
• Tencent: WeChat

———–transcription below

Episode 254 – Tencent Cloud.1
Jeffrey Towson: [00:00:00] Welcome. Welcome everybody. My name is Jeff Towson, and this is the Tech Strategy Podcast from TechMoat Consulting. And the topic for today, three lessons from my visit to Tencent Cloud. Although these companies are starting to be called AI cloud companies like Alibaba, AI Cloud, du AI Cloud, so I mean, that’s probably more accurate at this point.
Anyways, I visited, kind of a decent number of places within Tencent, mostly focused on cloud in the last couple months. Up at the big facility in Beijing, down in Shenzhen a couple times, and then actually in Guangzhou as well, which is where WeChat is, headquarters. So, kind of a lot. I’ve written it up for those of you who are subscribers, I’ve sent you, I don’t know, six or seven emails in the last month or so about WeChat.
Tencent Healthcare, general [00:01:00] Tencent, and then a couple on Tencent Cloud specifically. I’m going to talk mostly about those. cause that that’s really the one I’m the most excited about, to tell you the truth. That’s kind of my biggest focus in general is these AI Cloud companies. And on that list, yeah, Tencent, right at the top with Alibaba.
Baidu, Huawei, and a couple other places. So anyways, that’s what I’m going to talk about today. Kind of my three takeaways from that. Particular visit. let’s see, housekeeping here. if you aren’t subscribed, please do so. That really does help. If you can share or give a little review or something of this podcast that actually really makes a difference, I’d appreciate it.
On the consulting side, we are, last six months, we’ve been rolling out what we’re calling sort of customer improvement sprints, one-week sprints in how to really just sort of. Rapidly assess and push forward the customer experience, which is increasingly gen [00:02:00] AI powered customer experiences. cause there’s a lot of tools right there, right now in, in the future.
And that in my experience, is the single fastest way to sort of increase growth, retention, user engagement, all the metrics that sort of. You know, are the front of the train. They’re the engine of the train more than anything else. If that’s something you’re interested in, give us a call, go over to Tech Moat Consulting.
You’ll see it right on the front page. But that sort of surgical engagement, one week come in, assess, develop an action plan that can be launched immediately. that, that’s, that’s, I find that’s pretty good. So anyways, take a look, see what you think. Give us a call if that’s of value. standard disclaimer, nothing in this podcast from my writing website is investment advice.
Numbers and information from me and any guests may be incorrect. If views in opinions express may no longer be relevant or accurate, overall investing is risky. This is not investment, legal or tax advice. Do your own research. And with that, let’s get into the content. Now, I don’t really [00:03:00] have any concepts for today.
This is going to be. Basically, a hundred percent focused on a particular company, and I try and balance between those. Some days it’s a lot of theory, concepts, and other days it’s all company. I try to kind of be 50 50 net net, which I think will be the case today. So now Tencent, Tencent Cloud has been around for a while, 2018.
you know a lot of the China Cloud companies, Alibaba, Huawei, Baidu, Tencent, there’s also Kings Soft and a couple others in there. Kings Soft is for those who aren’t familiar. Before late June founded Xiaomi, he ran a company called Kings Soft, and then he kind of moved up to the chairman position, and within that was Kings Soft Cloud.
Which ended up being sort of the cloud company used by Xiaomi and some others. So Koft is actually interesting because it’s publicly traded and it’s a standalone cloud company, so you can actually get the financials for a [00:04:00] pure breed cloud company as opposed to, you know, usually it’s mixed in with Google or it’s mixed in with Microsoft or whatever.
It’s hard to tease out everything. Uh. Kings Soft Cloud is actually a pretty good little hack. It’s a good way to look at the economics of China, Asia Cloud, separately. Anyways, that’s one to keep in mind. But you know, the cloud companies in China haven’t been the rocket ships we’ve seen in the west, the Googles, the Azures, and so on.
adoption has been much, much slower single digit growth. For most of the history, not these rocket things. And that has a lot to do with the fact that the enterprise side of China in particular, is slower. there’s a lot of, in terms of, adoption, the benefits are not as clear. There’s a lot of manual workarounds you can do in the US You really want to digitize as much of the back office, the enterprise side as possible because it saves you a lot of money. [00:05:00]
In Asia, that’s not really the case. There’s a lot of engineers; there’s a lot of tech people. They’re not that expensive. So, you can kind of manually do things. that has been part of the story and there’s other reasons, but that’s part of it. And it was, that really changed about two years ago with Gen ai.
These companies started to move much faster than we’ve seen them before. The first out the gate. Baidu, I mean, they were posting gen AI services numbers within their cloud division, you know, revenue moving numbers within 12 months. And now we see the same thing with Alibaba. They’re moving quite quickly with cloud.
Within that story, Huawei has been slower. They are historically a hardware company. So, when, when you’re talking about their cloud division, which I think is super important, I actually have a lot of information on that. I’m not allowed to talk about it. it’s not secret or anything. This is not a public [00:06:00] company, but I’ve just been asked not to talk about a lot of it and what they are doing on the hardware side in terms of data centers, all the way from the, you know, the centers to the servers down to the chips, to the cooling systems.
Um. Super important. It’s going to be a geopolitical issue probably. when people realize what the cloud matrix, that’s the phrase to look for within Huawei Cloud Matrix, what it’s capable of. Yeah. You’re going to see some geo, oh, maybe we don’t need Nvidia chips. Right. So anyways, but they’re much more powerful on the hardware side and they’re moving into software as much as they can, but that’s not where they’ve lived.
They’ve historically been a manufacturing company, so. Tencent is the other one that’s been a little bit off the radar. Now, the reason Tencent gets my attention, obviously, cause it’s Tencent, Tencent Cloud, Alibaba, Huawei, and Tencent, the cloud businesses, [00:07:00] as far as I can tell, are all building global networks.
They’re building global digital infrastructure to support the cloud. Now, Baidu, China focused, now they’re starting with Asia. But as far as I can tell, the goal is to build infrastructure, digital infrastructure that spans the globe, which means when you access these services, like generative AI, latency is super-fast, and that matters for a lot.
You have to really, you know, build out an infrastructure that puts every user, every developer, every business within a certain number of kilometers. To your main data center, which like Huawei has three main ones in all of China, which they, you know, they call ‘me sort of their data oceans. And then when you move closer to the cities, they call them data lakes where they, you know, they don’t have the total horsepower of the data oceans, but they have a lot that’s closer, which matters when you’re doing sort of latency.
And then you get all [00:08:00] got, you got to get local and ultimately you got to have edge computing so that you can do AI driving cars and stuff. So, you got to build the entire infrastructure to make the suite of AI services work. And one of the reasons Huawei is so well positioned there is because they have always been doing the whole end-to-end solution.
They do edge devices, phones, laptops, PCs, operating systems for cars, smart homes. They do connectivity. They have the 5G network now they got the 5.5 G network. They’ve got private networks and they’ve got the data centers, they’ve got the entire thing. I don’t know anyone else who has all three. Anyway, so that’s important.
Now, Tencent, within that story, they appear to me to have global ambition starting with Asia. Most of these companies are big in Asia, but they’re also operating in the Middle East now. They’ve got some kind of cool products, projects in, Dubai, Abu Dhabi. They’ve [00:09:00] got a, they’re building basically the smart app, the mini programs, the super app for the Abu Dhabi government.
That’s Tencent Cloud. In Asia, they’ve got some pretty cool stuff. if you follow the news out here, GoTo, which used to be, you know, toed and go, they, they merged to Gotto, basically the most prominent digital champion of Indonesia. You know, they transitioned their whole architecture onto Tencent Cloud.
Which was just finished a couple weeks ago. There was a big announcement. They moved the whole company onto that. In terms of cloud projects, that’s really pretty impressive. so anyways, Tencent Cloud’s been making some moves in AI and in cloud within ai. Lots of big investments in LLMs. I’ll talk about what they’re doing.
They did a pretty big deal with deep seek where if you go on the main sort of. 10 cent app, the chat, [00:10:00] GPT of China’s yuanbao within there, when you start doing queries and whatever you want to do multimodal, you can choose which foundation model to build it on. And you can use hunyuan, which is Tencent internal proprietary, although it’s kind of going open-source set of models, or you can choose deep seek as the sort of model to run your thing on.
That’s, that was pretty big news. You know, if. If you’re building a model like Deep Seek and suddenly you are one of the two options within the WeChat and really the 10-cent ecosystem, that’s huge. The number of users you’re going to get is unbelievable, and the data you’re going to get, which will make your models better, is also phenomenal.
I mean, it would be hard to find a company in China, Asia that has more data than Tencent. Well, deep seek is now plugged into that system. and then the other thing we’ve seen, they’ve sort of been pushing international [00:11:00] Tencent cloud. I’ll talk about some of what they’re doing anyways, that’s what I want to kind of talk about.
But those three things all got my attention. I was kind of thrilled to go up to Northwest Beijing, visit their massive center up there. when you go up to that part of Beijing, your kind of going past the third ring road. there, there used to be, you know. Some tech companies there, but it’s really expanded now.
You have to kind of drive past peaking University in Xinghua. You actually can see my office as you go by my old office, but out there you’ve got Didi, you’ve got Baidu, you’ve got the massive Tencent Center. There’s some really big stuff happening in Northwest Beijing. Actually. It’s a good place to visit.
Anyway, so I went up to their massive complex, um. Opened in 2018. At the time, it was the largest office center in Asia. Has about 6,000 employees. Pretty cool. spent some time going around visiting, going through notes. Most of it I [00:12:00] can’t talk about. I’ve asked a lot of slides. I asked, can I show this?
Nope, nope, nope, I got, it was a lot of nopes. Fine. That’s the way it is. but so everything I’m saying is my own impression, my own conclusions. Nothing from Tencent itself. Um. In this podcast, but I had sort of a couple big takeaways. number one, Tencent Cloud. Tencent AI Cloud is doing what I call fast follower with advantages.
And this is how I kind of describe how Tencent operates, generally speaking. I’ll explain what that is. They’ve been doing this for years. They operate like a fast follower, not a first mover, and they lean into their advantages along the way, and it works incredibly well. It’s awesome strategy if you can do it.
within that they’ve sort of been repositioning their AI approach, which is a little different than it was last year. making some big investments, writing some very big checks to sort of catch [00:13:00] up with the leaders. I’ll talk about what they’re doing. number two, they’re going international, and not just Tencent Cloud, but really Tencent, basically WeChat as well.
I’ll talk about that. That’s actually really, really smart and I was really impressed with what they’re doing. WeChat has not really made a big international push since about 2012, 2015 when they wanted to be kind of, that was when Messenger was sort of the big new thing, right? WhatsApp was around then WeChat in China, line coming out of, South Korea and WeChat made an international push.
Then they went for Asia, they went for Europe as well. it didn’t work out and they kind of pulled back after that. Well, they’re going international again, but they’re doing it much more leading on the backend. They’re creating sort of tech services for players around the world that leverage mini programs, so they’re act, they’re sort [00:14:00] of moving with a product and a tech service as opposed to a B2C product.
I’ll talk about how that, that, that struck me as very, very smart. It actually struck me as a lot. like what, Alipay has done internationally over the last 10 years. And then the third one is, look, I expect Tencent Cloud to be one of the world’s top five cloud companies. Everyone knows the three in the US.
I expect sort of Alibaba and Tencent to be four and five for sure. Global players, not just China. And then Huawei is sort of on my maybe list. You know, on deck, but I think Tencent is almost guaranteed based on what they’re doing. So, we’ll see. Okay. Let me go into sort of point number one here now.
Tencent, doing fast follower with advantages in AI slide, AI cloud. Okay. Couple months ago, you know, we, we didn’t [00:15:00] really hear from Tencent in the cloud business, or at least in the AI business back in November, December. it looked. This is pressing reports, so I’m not totally sure this is true. Press reports were that 10 cents AI strategy was basically let’s plug AI into our existing products, WeChat, not gaming so much.
we com, which is sort of their enterprise services. Things like meetings and docs and definitely advertising. Like if you want to really study how to apply generative AI to advertising. Man, you got to study Facebook and Tencent cause that, you know, that’s where they make their money. They’re going to be far ahead of anybody in that particular area.
Anyways, that was kind of their thing and okay. If that’s true. Makes sense. Go for the use cases. In retrospect, maybe not great because it turns out AI is such a new technology, [00:16:00] you don’t really want to. Put your chips down on particular apps too soon. You kind of want to do what Baidu and Alibaba are doing, and I would say Google the same.
You want to play across the board. You want to put chips in everything. You want to build big models, small models. We want to build agents; we want to build multimodal. We want to do computer vision. I mean, you want to do all of it. I mean, you need to be a major player in creating models and all the foundational aspects of generative ai.
Now, maybe you don’t have to go all the way down to semiconductors, although you might argue that you should. I know Alibaba is, Baidu art is so, yeah. And then in addition, you want to do the apps and products and put them in all that, but yeah, you kind of don’t want to narrow it down too quick. And it looks like since, let’s say December, January, and this is all from press reports.
I’m not too sure this is true. It looks like they have kind of repositioned [00:17:00] and you know, they were a bit behind. If I go to hugging face or something, I don’t see 10 cent models being actively developed, but I see deep seek everywhere. I see Alibaba Kwen everywhere, right? So, we didn’t see that. We don’t see developer adoption across the globe of Hunyuan.
So, couple months ago, that was the rumor. Hey, they’re repositioning, they’re doing some different stuff. Couple months ago, there was a sort of a China entrepreneur symposium in Guandong. in the south and you know, sure enough, sitting at that meeting was Pony Ma, Tencent, CEO, super interesting guy, right next to him, Liang, which is basically deep seek CEO, the guy that everyone’s paying attention to.
Right? And then sure enough, this is like March. There was announcement of a deal, a partnership, something where Deep Seek and Tencent were tied up. Uh. [00:18:00] That’s pretty important. So that got a lot of news. And you know, if Yuanbao is kind of the chat GPT of China, it’s in the top three, depending which numbers you use.
You know, combining that with deep seek is a pretty important idea. And keep in mind like the, the, the foundation model under yuanbao is hunyuan. that’s more of a standard chat, GPT, like, um. Model, deep seek was about reasoning, right? That’s why it got people’s attention. It was a reasoning model that was dirt cheap and open source and you can download it, right?
And now everybody’s doing that. Like all the major players are to some in China to some degree are going open source and downloadable. because it turns out developers and companies just absolutely love that. And it also helps if it’s really cheap, but. Yeah, so anyways, that was a couple months ago, got everyone’s, [00:19:00] attention and they started to play across the board as far as I can tell, and they’re going to leapfrog their way up.
Now we, we’ve seen this strategy before by Tencent, so even if those press reports are not totally true, we have seen Tencent do this sort of what I call fast follower with advantages before, which is. They’re in an unbelievable position of visibility within the China ecosystem. Every single person in use China uses WeChat every single day.
And it’s not just Messenger. It’s Messenger, its payment, its mini programs, it’s search. On top of that, they have the whole suite of content, movies, TV shows, 10 cent video, short video. They have WeChat channels. And then on top of that, they have gaming. I mean, they see everything at least on the consumer side.
So, what they can do is when they start seeing something get [00:20:00] traction. Like, when Pin Duo, duo started to get traction, we would look at all these fifth-tier cities are starting to use Pin Duo, duo, and not, let’s say Taobao. They’re going to know that before everybody, and then they can go to those companies.
And I’m not sure how nice these meetings are. I mean, they could in theory go in there with a Godfather, gangster like, deal, we want to invest in you. And if we invest in you, we will steer traffic your direction. And if you don’t let us invest, we’ll invest in your competitor. I don’t know if they’re really saying that.
it’s true. They could do that. And you know, if they’re looking to get into a space, they are going to invest in one of the top two or three players and as soon as they invest they can start to steer. We WeChat that way, which is kind of how Pin Duo Duo was a big part of how they took off. You know, everyone likes to talk about the Pin Duo duo, business model.
I like to point out for the fact that they were selling stuff that was super cheap, [00:21:00] which helps you get adoption and they had a strategic partnership with Tencent early on as sort of the anti-Alibaba e-commerce play. Right? Everyone thinks Alibaba does e-commerce. Tencent does Messenger and game. No, no, no.
Tencent has had major investments in place within e-commerce for a long time. They were strategic investor in Meituan, definitely in Pin Duo Duo. a couple others. So, they’ve been a player and now they got mini programs, which lets them do an e-commerce within. So, they’re major in e-commerce. They’re probably number three depending how you measure it Anyway, so they go in there with this play as sort of a fast follower.
Then they steer the traffic and you know, they can catch up. And they’ve been doing this forever in, in all their businesses, like food delivery, when bike sharing was big and even within. WeChat. WeChat was not the first mover, and in fact, you could argue WeChat was kind of behind. but they [00:22:00] came in a bit later.
They didn’t buy anyone. In that case, they built it in-house. That was Alan Zhang up in Guangzhou, who in theory famously sent an email late at night to Bonnie Ma who said, I want to do this. He launched it. That’s the company lore and. Now in that case, they didn’t buy, but they then used qq, the original Messenger, which is PC based, which still has like 500 million monthly active users.
QQ is still huge. Don’t hold me on that number, but it’s hundreds of millions. And then they just pushed that into WeChat and they pushed gaming into WeChat. cause they had such massive advantages with their current ecosystem that they can push users over. And WeChat took off, became dominant. And then, you know, a couple years later they basically did a Pearl Harbor style attack against Alipay.
That was Jack Moss’s description. It was a Pearl Harbor attack where they did payment over Chinese national, you know, new holiday and everyone started sending red payment, red packets with payment [00:23:00] and they sort of snuck attack on Alipay and became a major player in payment and in like three months. It was pretty amazing, history.
Anyway, so we see this, this sort of strategy a lot. the one I used to point to a lot was Sugo. Which for a long time was the number two search engine of China. Number one was Baidu. Number two was Sugo, which was publicly traded back then. Okay. Tencent was an investor in Sugo, but at the same time, they were developing WeChat search within WeChat.
Okay. And you’ll see Tencent do this play pretty frequently. They will. They will invest. They will usually have competition in anything they’re doing. So, they don’t do just one internal project, they do two or three in the same area and let them compete, or they invest in something like a search company outside of Tencent, Sugo, and they have an internal one WeChat search, and they kind of have to compete.
And if you’re doing search. You know, the key [00:24:00] thing is access to data. Well, in China there’s a lot of public data websites, all that, but a whole lot of the, you know, data that you would want to search is sort of inside the walled garden of the Tencent ecosystem and all the mini programs and stuff like that.
So, they had both. Now since then, they acquired Sugo and I don’t know, they’ve merged. I know they brought it in house as a company, but you’ll see them do this strategy a lot, which. You know, I just call it fast follower with advantages. identify what’s going to be important. You’re generally going to see it before other people see if it’s getting traction, then create your own copy or do an acquisition and then lean into your advantages, push it into the ecosystem.
And, yeah, they’ve done this successfully so many times. I’ve always joked like, it must be really easy to do, like strategic investing as part of the m and a team of Tencent. Like it’s got to be the easiest deals in the world. You just show up [00:25:00] at any company you want and you say, Hey, we’re Tencent. We’d like to invest in you and who can match your pitch?
We’re going to invest in you at a normal price. It’s not going to be a great price. It’s not going to be a bad one, and then we’re going to push traffic to you. I mean, how can you lose money on. Like, the growth from the ecosystem alone will give you a bump of 20, 30, 40, 50%. So, there’s almost like if you, if you’re sort of in the venturing business within Tencent and you go out and you try and be an investor on your own, you know, it’s like playing baseball with, you know, a big softball instead of a hard ball like that.
The game is just easier. I always wonder how they do after they leave. you know, if their returns are in, I, it’s too easy of a game when you’re inside. Anyways. Alright, lesson number two. WeChat, although we could really say WeChat and Tencent Cloud are going international as sort of both a product and a tech [00:26:00] service.
Now, when WeChat tried to go international, before it was going as a B two, you know, B2C product, hey, sign up for Messenger. You can talk with your friends. But I think one of the reasons it failed was. You know, two, it was a hard market and you know, there’s only going to be a couple winners and that’s the way it goes.
WhatsApp did well, line did well in a couple countries, but the other was, you know, the things that made WeChat so great in China. Payment and especially mini programs. You’ve also got search in there, mini games as well. Nobody talks about mini games. Everyone talks about mini programs. Mini games is huge.
But that stuff didn’t really work outside of China. You couldn’t do your government registrations; you couldn’t pay your utilities. You didn’t have, you know, literally millions of merchants and brands with their own little mini apps within the ecosystem. You know, it was, it was more of a standard messenger when they went abroad, so not surprising.
Okay. [00:27:00] Now, one of the reasons I like Alipay International is. They did something very clever. They said, okay, we’re going to try to go international. And they, they arguably, they were one of the most aggressive international China companies, maybe number one since like 2015. They dialed that back when things got political, but generally true.
And you know, they would do payment Ali. And they would help Chinese consumers go to Paris or wherever and pay for things, and they basically offer them services. Like if you pay, they’d work with the merchants of Paris and you know, Euro, Disney, whatever. So, you can pay with your phone and basically draw from your wallet back in China, within Alipay and pay the merchant in Paris.
And they would give you a very good exchange rate. I mean, fantastic exchange rates. So, people like that. It that it encouraged adoption. Everyone started using it fine. then later they added sort of, [00:28:00] marketing services on top of that, which is what they call Alipay Plus, if you’re in Southeast Asia, next time you’re in any store like seven 11 in Malaysia or Thailand, look at what payment things you can use, and you’ll probably see Alipay plus.
What Alipay Plus is, it’s a tech service, a payment, really marketing and payment service that’s offered to digital wallets and payment providers in that country to be able to let tourists pay from their home country. So Alipay Plus is not something you sign up for in Malaysia, Singapore. As a consumer, but if you are using whatever it is, sintel pay or using true money or whatever in Thailand, how do I explain this?
If you’re a Chinese consumer coming to, let’s say Thailand, you can pay with Alipay at home and it will draw you. Money from home and you’ll get a good [00:29:00] exchange rate. Any local wallet provider that is signed up for Alipay Plus can offer the same thing to their customers. So, if a true money user in Thailand flies to Singapore, they can walk up to a counter and if it says Alipay plus they can pay their using their true money.
So basically, they said, look, we’ve built this for Chinese consumers when they go abroad. In our own product, let’s help other digital wallet providers around the world. Pakistan, Philippines, Thailand, Korea. Let’s help those wallet providers offer the same service. So, we’re doing tech services for those companies.
So, I forget what the Pakistan one is. Easy. Paisa, Philippines is G Cash. south Korea’s cacao Pay, they can all do the same thing that Chinese consumers can do because. Of basically Alipay Plus. So, it’s this idea of, look, we don’t have to necessarily go abroad as our own product, Alipay Plus [00:30:00] we can also go abroad as a tech service provider and help the local companies do some of the things that we do back in China for our people.
That’s a very good strategy and it’s very successful. Well, it’s, it’s pretty successful. Okay. This, when I look at Tencent Cloud and WeChat going international, that’s what it looks like to me. You know, they go into Abu Dhabi and they give Abu Dhabi, no, they’re going to have their own apps in Abu Dhabi. Right.
Their own payment, their own messenger, all of that. But they’re going to offer them. The one thing they don’t have is we know how to do mini programs. How would you like us to build you your own mini programs functionality in your app in Abu Dhabi? Right. That’s what everyone wants in this world. They all want to be the WeChat of their local destination.
Well, let’s, let’s do it as a service and help them build it, and we’ll put it on Tencent Cloud and we’ll rent it from there. And we’re the experts in mini programs. We’ll help you do that. Just like Alipay, [00:31:00] help these merchants do cross border payments. We’ll help these merchants or these payment providers.
Or app, you know, providers will help them do their own mini programs. So, they’re coming in as a tech service kind of in the back door. and that’s what they did. They went to Abu Dhabi and they helped Abu Dhabi, the city create a super app. So, if you’re an Abu Dhabi, there’s a super app, which was, you know, develop locally government entities, 30 government entities are within this app.
You know, well they say 30 government entities and private sector partners, but there are basically 700 different government services you can use within the single app. Just like when you’re in WeChat in China and you have, you know, hundreds, thousands, really of services you can do. So, they’re offering that as the Tencent Cloud mini program platform.
So, they’re coming in as a tech service provider. You know, that’s really cool. Now, what kind of super, you know, the Super app, what would it include? [00:32:00] business registration, license applications, housing and property leasing, healthcare facility access, tourism information, insurance matters, traffic, t traffic, ticket management, education, and work benefits.
Right. So, you know, I thought that was a very clever way to do it. Now, on top of that, once you come in with your tech service saying, we’ll help you create your own mini programs, okay, what is this going to run on? Well, it’s probably going to run on Tencent Cloud. Who’s going to do the data management? Probably Tencent Cloud.
Oh, you’re getting more and more usage. You need more and more storage. You know, it’s a perfect sort of wedge. Product service to break into a market and then maybe you even do your own products on top of that. But this idea of we’re going to go international, leading with a tech service and a product as well.
Really smart. So, they have another project I think coming up with Orange, you know, telco company in the Middle East Africa. They [00:33:00] have a super app they want to do. very interesting. So. I thought that was kind of neat and you can see these rolling out and I would expect them to really sort of open the door for their cloud services going international.
And then, you know, if you look at cloud services, I mean, it is an endless list of potential services and you know, it’s. It’s kind of amazing all the things that are offered by these, you know, the basics would be okay, we do storage, we can compute connectivity, but then you get into industry, you get into manufacturing, you get into transportation, you get into financial services.
You got all those sort of enterprise focused apps and services, and now on top of all of this you get gen AI apps and services. So, you know, they’re very well positioned to sort of grow with this approach. I think. We’ll see, but I’m kind of watching closely what they’re doing mostly in Asia and the Middle East.
one service they did. So, I kind of asked like, okay, what do [00:34:00] you, obviously you got a massive suite of services in your cloud program. Fine. What’s really getting adoption? You know what’s selling, honestly? And one of the ones they mentioned, not the only one was audio visual services. Which was kind of a surprise.
I didn’t quite get that. South Korea, Japan, parts of the Middle East, parts of Southeast Asia. Basically, going to SMEs in business, entertainment and education and saying, hey, you’re doing a live stream for your sporting event. how good is your bandwidth? Your local carrier you’re dealing with? How good is the bandwidth you need?
A lot of it. Is it reliable? Are you willing to do your big live concert event in, I don’t know, Dubai? totally dependent on the local carrier. Or would you like our service on top of that? That will be, you know, totally [00:35:00] reliable. guarantee you the bandwidth. We’ve got, you know, our cloud network all over there to back it up, all of that.
Apparently that’s a pretty good pitch. So, they say, look, we can give you stable, low latency, load bandwidth, and highly scalable video services. eSports could be conference calling, work meetings, live presentations, all of that. I thought that was really kind of interesting sort of audio and visual ser and video services.
Anyways, I didn’t really see that coming, but yeah, we’ll see. Okay, last one, last takeaway. I, as I mentioned, I expect Tencent Cloud to be one of the world’s top five AI cloud company. Now you could say top five cloud companies, you could say top five AI companies. You know, those kinds of things are kind of meshing together at this point.
So, I expect them to be a global player, at least an Asia player. Definitely in, you know, leader in Asia, China, Asia. I’d [00:36:00] also say definitely a leader in the sort of global south. Outside of that, you know, how much in Europe and the us We’ll see how that’s going to play out. But I’d put them in the top five for sure.
the AI services, I’m kind of keeping an eye on for them right now. Obviously there’s sort of chat GBT, like assistance who un bow. Pretty, pretty cool. I think their we com business, their, basically their enterprise side business is really interesting. They’re putting their, you know, gen AI tools into meetings, docs, you know, they’re quite a sort of standard enterprise tools.
So, in that sense, they kind of look like a combination of open AI and Microsoft. Really strong on the B2C side, networking messenger payment, but also really strong on the enterprise side. So that’s interesting. And then they’ve got AI coders for developers. So those four use cases are kind of the [00:37:00] ones I’m keeping my eye on.
Now. I’ve looked into some other ones like gaming. Tencent gaming is obviously huge. Not clear to me that that actually makes sense. I thought it did. I think I did a podcast on this a year ago that, you know, we’re going to have these battle bots and you could play as a team and all that within, I’m not sure that’s actually happening.
I’m not sure they. The user adoption is there. we’ll see. a lot of these things I don’t know, but those four are kind of on my list. Okay. That is pretty much what I wanted to talk about for today. Not too long today. I hope that is helpful. I’m going to do a lot more about Tencent, you know, really these AI cloud companies of China, Asia, you know, on my short, short list, I’m going to try and be kind of be one of the go-to experts about.
AI cloud in Asia. I think that’s kind of the, you know, the biggest thing happening, but who knows? So, yeah. Anyways, [00:38:00] no concepts for today, just company. And for those of you who are subscribers, you’ve probably gotten seven or eight emails from me about various parts of Tencent in the last, month or so.
I’m going to keep going on that. As for me, it’s just been a pretty good week. I don’t really have any news or, uh. I Dunno, updates, no TV recommendations this week, although I think, I think too hot to handle Italy is dropping maybe today. that’s probably a terrible idea, but I’ll probably watch a little of that.
If you have any recommendations on TV shows to watch, you know, high quality ones I’d, I’d appreciate it. Like someone recommended Peaky Blinders to me last year. That was great. I really kind of enjoyed that one. Anything like that? Yeah, I got to, I got to find something better to watch these, these reality shows are just the worst.
So anyways, that’s it for me. I hope everyone is doing well. Talk to you next week. Bye-bye.

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