Chinese tech giant Tencent Holdings will spend $70 billion over the next five years in technology infrastructure including cloud computing, artificial intelligence and cybersecurity.
The news comes after the proposal by the Chinese Government for a tech-driven structural upgrade of the world’s second-largest economy through expenditure in “new infrastructure” and a boom in demand for business software and cloud services.
Other key sectors of the investment involve blockchain, servers, big data centres, supercomputer centers, internet of things operating systems, 5G networks and quantum computing, Dowson Tong, senior executive vice president of Tencent, told.
Tencent is best recognized for its WeChat messaging app and a range of popular games but is striving to grow into business services as consumer internet growth slows and companies shift number-crunching from their own computers to the cloud.
Tencent shares were 2.5% higher following the decision. Tencent has said while cloud businesses hurt amid the COVID-19 outbreak is presumed to see accelerated cloud services and enterprise software adoption from offline industries and public sectors over the longer term.
“Expediting the ‘new infrastructure’ strategy will help further cement virus containment success,” Tong was quoted saying.
According to research firm Canalys, Tencent Cloud had 18% of China’s cloud market in the fourth quarter, trailing Alibaba Group Holding Ltd which controlled 46.4%.
Alibaba said last month it would invest $28 billion in its cloud infrastructure over the next three years.