Tencent does not want to rely on "token business" to make quick money

Author | Huang Yu

Editor | Wang Xiaojun

Over the past year, major cloud vendors have intensified their competition in the AI battlefield, with Alibaba Cloud, ByteDance's Volcano Engine, and Baidu Intelligent Cloud all making their presence felt at airports, advertising themselves as "number one" in different segments of the AI cloud market. However, Tencent Cloud has refused to engage in this battle for traffic.

Recently, at a media exchange event, Yang Chen, Vice President of Tencent Cloud and head of industrial ecosystem cooperation, provided an answer. He revealed that this is indeed related to Tencent's style; the AI race is a marathon, and having just run two laps, there is no need to show how fast Tencent Cloud is running. "Perseverance is more important than speed."

Behind this "perseverance" is Tencent Cloud's clear commercialization choices. Yang Chen explicitly stated that Tencent Cloud does not believe that token is a good business—this type of standardized computing/model invocation business centered on large model token consumption may seem large in scale, but in reality, customer stickiness is very poor, and many customers will churn after obtaining the invocation key (interface permission).

"We believe that the truly good and healthy business in AI is still application scenario-oriented, and we need to compete in scenarios."

This path naturally determines that Tencent Cloud will not be a leading player in the early stages of this AI marathon.

In the commercialization process of the AI industry, the token business is an early "traffic entry point" and a prerequisite for AI applications, its value is undeniable, but it is clear that Tencent does not intend to make its token the core profit model.

In the face of the incremental opportunities brought by AI, Yang Chen told Wall Street Insights that each cloud vendor has a different positioning, and Tencent Cloud focuses on the integration of AI and SaaS products, which is also the most critical point of differentiation in Tencent Cloud's positioning in the entire market.

Against this backdrop, Yang Chen emphasized that Tencent will also invest more effort in finding innovative value points in C-end application scenarios, rather than simply looking at the underlying models or the underlying token consumption; this is not Tencent's direction.

Today, the global AI competition has entered the second half. At the Tencent Cloud Partner Conference on January 22, Tencent Group Vice President and President of Government and Enterprise Business Li Qiang pointed out that the "hundred model war" that erupted two to three years ago has now settled, and only a few strong players from China and the United States can survive. Meanwhile, the generational gap in model capabilities is narrowing.

"In the second half of AI, computing power is still in short supply, so the focus of model attention has changed. In the past, the focus was more on model parameters, but today it is more on the 'density rule,' which is a battle of scenarios, no longer entangled in parameter size and scores, but focusing on how to improve model computing efficiency based on consuming less computing power, and whether it can solve specific scenario efficiency issues and user challenges."

In this context, the focus of competition among cloud vendors will also change Tencent Cloud Vice President Wu Qisheng stated that the first half of AI is characterized by simple and crude resource selling, with most enterprises still unclear about the application scenarios and cost-reduction paths of AI; after entering the second half in 2026, the industry will shift from resource selling to application selling, focusing on the actual landing value of AI.

Since last year, standing at the critical period of AI application explosion, Tencent Cloud has undoubtedly been the spotlight business for Tencent, not only because the explosion of AI applications has driven strong growth in cloud business performance but also because Tencent Cloud has simultaneously become the base camp for Tencent's heavyweight AI products for both B-end and C-end.

At the 2026 Tencent Cloud Partner Conference, Tencent Cloud reviewed the achievements made in the past two years under the opportunities presented by AI.

Data provided by Tencent Cloud shows that in the past year, the public cloud revenue of Tencent Cloud partners continued to maintain double-digit growth, with orders related to AI and SaaS products doubling, and the revenue from AI large model products increasing more than 50 times in two years. Meanwhile, the overseas business grew by 30% year-on-year last year.

It is reported that as Tencent Cloud increases its investment in self-developed products, the revenue growth rate of PaaS and SaaS products significantly exceeds that of IaaS, especially in AI and overseas markets.

Notably, Tencent Cloud, which proposed to achieve breakeven in 2024, successfully turned a profit in 2025.

In Tencent's earnings call for the third quarter of last year, Tencent President Liu Chiping disclosed for the first time that the cloud business had achieved profitability in 2025. However, he also mentioned that changes in AI chip supply had affected cloud service revenue to some extent.

The financial report shows that in the third quarter of 2025, Tencent's enterprise service revenue grew by more than ten percentage points year-on-year, benefiting from the revenue growth of cloud services (including growth driven by increased demand from enterprise customers for AI-related services) and the growth of merchant technology service fee revenue driven by the expansion of WeChat Mini Program transaction volume.

More than three years ago, Tencent Cloud proposed, "I would rather have 150 pounds of muscle than 200 pounds of fat." At the beginning of last year, at the group annual meeting, Tencent Group Chairman and CEO Jack Ma also praised Tencent Cloud, stating that Tencent Cloud's performance in 2024 exceeded his original expectations, and in 2025, Tencent Cloud is expected to "emerge and form a continent."

Looking back now, after more than three years of transformation, focusing on self-development and promoting integration, Tencent Cloud has seized the opportunities presented by AI and overseas markets, opening up a new situation