Chinese web giant Tencent can't buy all the GPUs it wants
(2025/11/14)
- Reference: 1763093627
- News link: https://www.theregister.co.uk/2025/11/14/tencent_q3_fy2025/
- Source link:
Chinese web giant Tencent’s capital expenditure is slowing and the company expects it will decelerate further due to its inability to buy all the GPUs it wants.
Tencent is a sprawling conglomerate whose messaging and e-commerce apps have over a billion monthly users and are ubiquitous parts of modern Chinese life. The company’s games are popular around the world, and its video platforms attract huge audiences and advertising revenue. The company’s public cloud has a ten percent share of the Chinese market. The company has invested heavily in AI to power its services and in its earnings announcement reported the tech is “benefitting us in business areas such as ad targeting and game engagement, as well as in efficiency enhancement areas such as coding, and game and video production.”
Comparable companies like Meta, Google, Amazon, and Microsoft report similar outcomes from adopting AI and then say they’ll achieve even better business outcomes by ramping their spending on AI infrastructure – which already top $10 billion a quarter – for the next few years.
[1]
Tencent, by contrast, reported Q3 capex of RMB13 billion ($1.9 billion), down 31 percent compared to the previous quarter and 23 percent year-over-year.
[2]
[3]
On the company’s earnings call, execs said capex will fall further still, due to “a change in terms of AI chip availability” and “supply chain constraints sourcing GPUs.”
The company said it has all the GPUs it needs for its own operations but is experiencing “limited impact” to revenue at its public cloud because it doesn’t always have enough accelerators to rent to its clients.
[4]Huawei lays out multi-year AI accelerator roadmap and claims it makes Earth’s mightiest clusters
[5]Baidu answers China's call for home-grown silicon with custom AI accelerators
[6]Blackwell a no-sell in China as trade deal fails to materialize
[7]China proves that open models are more effective than all the GPUs in the world
While Tencent’s capital expenditure fell, its revenue and profit rose.
Q3 revenue reached RMB 192 billion ($27 billion), a 15 percent year-over-year improvement and five percent better than Q2. Gross profit improved by 19 percent, year-over-year.
[8]
Tencent didn’t offer predictions for future revenue, so it’s hard to say if its difficulties buying GPUs will make it harder for the company to develop and deliver AI services. On its earnings call, execs mentioned work on improved large language models that Tencent will use to power its AI offerings, suggesting they are unconcerned that procurement problems will dent its ambitions.
That might be because other Chinese companies are rapidly developing GPUs that Tencent thinks will eventually serve its needs – although the company’s prediction of falling short-term capex suggests those accelerators won’t be easy to come by for a while. Or perhaps, like its local rival Alibaba, Tencent has found clever ways to [9]use GPUs more efficiently .
Whatever the reason for Tencent’s capex, its admission of supply chain strife will go down well in Washington as successive US administrations have felt it best not to allow American tech companies to sell their best AI accelerators to China on grounds that they will help Beijing to modernise its military.
[10]
The US earlier this year [11]added Tencent to its list of “Chinese military companies”, a description the web giant protested because its main activities are related to social media and entertainment. ®
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[4] https://www.theregister.com/2025/09/18/huawei_ascend_roadmap/
[5] https://www.theregister.com/2025/11/13/baidu_inference_training_chips/
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[9] https://www.theregister.com/2025/10/21/alibaba_aegaeon_gpu_scheduling_improvements/
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[11] https://www.theregister.com/2025/01/07/tencent_catl_chinese_military_company_list/
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Tencent is a sprawling conglomerate whose messaging and e-commerce apps have over a billion monthly users and are ubiquitous parts of modern Chinese life. The company’s games are popular around the world, and its video platforms attract huge audiences and advertising revenue. The company’s public cloud has a ten percent share of the Chinese market. The company has invested heavily in AI to power its services and in its earnings announcement reported the tech is “benefitting us in business areas such as ad targeting and game engagement, as well as in efficiency enhancement areas such as coding, and game and video production.”
Comparable companies like Meta, Google, Amazon, and Microsoft report similar outcomes from adopting AI and then say they’ll achieve even better business outcomes by ramping their spending on AI infrastructure – which already top $10 billion a quarter – for the next few years.
[1]
Tencent, by contrast, reported Q3 capex of RMB13 billion ($1.9 billion), down 31 percent compared to the previous quarter and 23 percent year-over-year.
[2]
[3]
On the company’s earnings call, execs said capex will fall further still, due to “a change in terms of AI chip availability” and “supply chain constraints sourcing GPUs.”
The company said it has all the GPUs it needs for its own operations but is experiencing “limited impact” to revenue at its public cloud because it doesn’t always have enough accelerators to rent to its clients.
[4]Huawei lays out multi-year AI accelerator roadmap and claims it makes Earth’s mightiest clusters
[5]Baidu answers China's call for home-grown silicon with custom AI accelerators
[6]Blackwell a no-sell in China as trade deal fails to materialize
[7]China proves that open models are more effective than all the GPUs in the world
While Tencent’s capital expenditure fell, its revenue and profit rose.
Q3 revenue reached RMB 192 billion ($27 billion), a 15 percent year-over-year improvement and five percent better than Q2. Gross profit improved by 19 percent, year-over-year.
[8]
Tencent didn’t offer predictions for future revenue, so it’s hard to say if its difficulties buying GPUs will make it harder for the company to develop and deliver AI services. On its earnings call, execs mentioned work on improved large language models that Tencent will use to power its AI offerings, suggesting they are unconcerned that procurement problems will dent its ambitions.
That might be because other Chinese companies are rapidly developing GPUs that Tencent thinks will eventually serve its needs – although the company’s prediction of falling short-term capex suggests those accelerators won’t be easy to come by for a while. Or perhaps, like its local rival Alibaba, Tencent has found clever ways to [9]use GPUs more efficiently .
Whatever the reason for Tencent’s capex, its admission of supply chain strife will go down well in Washington as successive US administrations have felt it best not to allow American tech companies to sell their best AI accelerators to China on grounds that they will help Beijing to modernise its military.
[10]
The US earlier this year [11]added Tencent to its list of “Chinese military companies”, a description the web giant protested because its main activities are related to social media and entertainment. ®
Get our [12]Tech Resources
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[4] https://www.theregister.com/2025/09/18/huawei_ascend_roadmap/
[5] https://www.theregister.com/2025/11/13/baidu_inference_training_chips/
[6] https://www.theregister.com/2025/11/07/china_nvidia_blackwell/
[7] https://www.theregister.com/2025/07/19/openai_us_china/
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[11] https://www.theregister.com/2025/01/07/tencent_catl_chinese_military_company_list/
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